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Datawatch November 2014
Datawatch November 2014
Datawatch November 2014
NOVEMBER 2014
ZE Publishes White Paper
about the Benefits of
Acquiring ZEMA
Powered by
Delisting of products
and datasources
Potential impact
on data
Editorial 5
Electricity Markets Expand and Get Integrated. Moving towards Convergence.
Power 7
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Power
Petroleum
FERC Expands SPP Market by Integrating Western-UGP, Basin Electric, and Heartland
Argus Adds New NYISO Power Forwards and Heat Rates Data Modules
Czech Republic, Hungary, Romania, and Slovakia Integrated into European Power Markets
Thomson Reuters Offers Forecast Tool for Brazilian Power Markets
PJM and NYISO Implement Coordinated Transaction Scheduling
Nodal Exchanges to Form Nodal Clear as a Derivatives Clearing Organization
NYMEX Revises MISO Michigan Hub Electricity Contract Names andSizes
NYMEX Modifies Block Trade Minimum Threshold for North American Electricity Futures and Options
ERCOT Mobile App Offers Updates in Five Minute Intervals
Petroleum 12
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Data
Vendors
Market
Analysis
In Depth
November 2014
Other
Finance
23
Softs and
Metals
Natural Gas
Coal
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Nat Gas
Editorial
Summary
Contents
Platts to Change Calorific Value Basis of Russian and Poland Baltic Coal Assessments
29
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Power
SOFTS 30
Platts to Publish Singapore Time Sugar Futures Assessments
30
Argus Adds New Assessments to Argus Biomass Report and Data Module
30
Argus Introduces New RIN Americas Biofuels Assessments
31
Successful Farming and AgriCharts Launch New Mobile Application for Farmers
32
CME Group Delists Urea (Prilled) FOB Yuzhny Swaps
(Clearing Only) Contracts
32
Platts to Launch New UK Hot Rolled Coil Assessment
33
Platts to Release Daily Data Analysis on Turkish Rebar Billet and Scrap Markets
33
Petroleum
METALS 33
Platts Introduces New Dry Freight Wire Monthly Report
34
NYMEX to List New Iron Ore Futures Contract
34
ICE Benchmark Administration to Become New Administrator of the LBMA Gold Price
35
Platts to Cease Publishing Weekly New York Dealer Osmium Price
35
Platts to Remove Weekly FOB China Tungsten Prices
36
Platts to Delist CIF Japan Indium Price Assessment
36
Platts Removes Some Fixed Pages from Metals Alert Service
36
HKEx Group and China Merchants Group to Collaborate on Product Development
36
Platts to Increase Frequency of US Midwestern Wire Rod Assessment
36
Nat Gas
Coal
Finance 37
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Softs and
Metals
Finance
Other
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Data
Vendors
Editorial
Summary
Coal 29
Market
Analysis
In Depth
November 2014
49
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Petroleum
Power
48
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Editorial
Summary
Other 48
Nat Gas
InDepth 59
Coal
Softs and
Metals
Finance
Other
Data
Vendors
Market
Analysis
In Depth
November 2014
Power
By Olga Gorstenko
Coal
Softs and
Metals
Finance
Other
Data
Vendors
Across the ocean, the European Union marked another milestone on its way to consolidating
different countries into one common power marketplace. Czech Republic, Hungary, Slovakia
and Romania launched a coupled day-ahead electricity market on November 19, 2014.
Heading towards the creation of an internal energy market for Europe, this set of harmonized
procedures is moving power markets across Europe closer for future integration.
Nat Gas
In November, two marketplaces one in the Midwest United States and another in Europe
announced that they are expanding their borders. Following the FERCs order of November 10, 2014,
SPP will double the size of its service area with 9,500 miles of transmission lines and more
than 3 million customers coming from Heartland Consumers Power District, Basin Electric
Power Cooperative, and the Western Area Power Administrations Upper Great Plains Region.
The complete amalgamation is expected to take place in October 2015. However, prior to this
glorious event, utilities will have to jump through many regulatory hoops. Some of them have
to do with increased complexity over ongoing SPP and MISO cost allocation and the Joint
Operating Agreement dispute that emerged after Entergy announced its departure from the
SPP membership in order to join MISO. Another issue and this one is unconventional is
that SPP will now have to deal with the federal agency status of WAPA that has a statutory
obligation to provide preferential service to a certain group of clients (preference customers)
and also falls under different exemptions that apply to federal entities. But those are
only minor glitches.
Petroleum
With the news remaining totally focused on crude oil markets over the last several months,
the electric power sector has been somewhat abandoned by newsmakers. Meanwhile, during
this period, electricity markets have been generating some very interesting developments. On
the menu, there are several items offered by balancing authorities; regardless of the scale or
location of these changes, all of them indicate the common trend of expansion by organized
marketplaces and realignment of practices along interfaces between neighboring markets. In
short, it means convergence, whether it is convergence of business practices, processes, or
even prices.
Market
Analysis
Consolidation and integration processes on a country- or even county-level are very tenuous
and lengthy; however, even alignment of practices along market interfaces is not an easy task.
Initiatives on eliminating seams in interconnected grids through modifications of the existing
tools and processes have been taken on by several system operators, especially those
5
In Depth
November 2014
Editorial
Summary
Editorial
Power
Petroleum
Nat Gas
Finance
Other
Data
Vendors
Market
Analysis
In Depth
Softs and
Metals
Ultimately, many ends meet at the selection of software and hardware solutions that support the
delivery of better and faster decisions. And of course, the speed of the software is not the only
factor to consider. November 2014 also brought us the very educational case of CAISO that, two
weeks after the full launch of the Energy Imbalance Market (EIM) on November 1, 2014, had
to request FERC to waiver tariff provisions, to ensure market prices more accurately reflect[ed]
system conditions in EIM. Apparently, according to CAISO, a series of conditions that reduce
the amount of flexibility and information available to the EIM systems is causing the market to
appear more constrained than actual conditions warrant and triggering unrepresentative high
prices. I dont know about you, but it certainly sounds to me that somebody added a bit of the
margin in the algorithm or perhaps neglected to add some parameters, conditions, or something
of this nature And with the noble intentions of realigning neighboring markets in the West, EIM,
as it stands now, has not been the best case of price convergence and arbitrage opportunities
reduction. But we are still learning here, right?h
Coal
November 2014
Editorial
Editor
Olga Gorstenko
Phone: 778-296-4183
Email: olga@ze.com
Advertising & Vendor Relationships
Bruce Colquhoun
Phone: (604) 790-3299
Email: bruce.c@ze.com
Have an idea for an article or would like to
contribute to an upcoming issue?
Write to us at datawatch@ze.com
To get real-time data updates, follow
@zedatawatch on Twitter
To access previous issues of ZE DataWatch,
go to datawatch.ze.com
ZEMA Inquiries
Bruce Colquhoun
Phone: (604) 790-3299
Email: bruce.c@ze.com
Summary
Olga Gorstenko
Editorial
Summary
Power
Editorial
Petroleum
Nat Gas
Coal
Finance
As a result, the geographic footprint of the regional power market has been expanded to
include significant portion of the Upper Great Plains that spans the Eastern and Western
Interconnections of the US electric grid. This area consists of approximately 9,500 miles of
transmission lines.
Basin Electric serves 2.8 million customers in territories covering approximately 540,000 square
miles, using nearly 2,100 miles of transmission lines and 70 switch yards.
Data
Vendors
Heartland is a public corporation and political subdivision of the State of South Dakota. It
provides wholesale power to 28 municipalities in eastern South Dakota, southwest
Minnesota, and northwest Iowa, to six South Dakota state agencies, and to one electric
cooperative in South Dakota.
Other
Western-UGP owns an extensive system of high-voltage transmission facilities and markets federally
generated hydropower in the Pick-Sloan Missouri-Basin Program-Eastern Division of Western.
Market
Analysis
In Depth
November 2014
Softs and
Metals
On November 10, 2014, the Federal Energy Regulatory Commission (FERC) announced that it
has expanded the Southwest Power Pool, Inc. (SPP) market by integrating into it Western Area
Power Administration-Upper Great Plains Region (Western-UGP), Basin Electric Power
Cooperative (Basin Electric), and Heartland Consumers Power District (Heartland).
Description
NYISO-Zone B
NYISO-Zone D
NYISO-Zone E
NYISO-Zone H
NYISO-Zone I
NYISO-Zone K
Petroleum
Market ID
215
216
217
218
219
220
Editorial
On November 21, 2014, the following markets were added to the Power Forwards and Heat
Rates data modules of the Argus Forward Curves publication:
Summary
Power
Nat Gas
ZEMA provides data visualization and dashboard reporting tools specifically designed for power and energy market
participants. To learn more, book a complimentary ZEMA demonstration.
Coal
Finance
The 4M MC uses the Price Coupling of Regions (PCR) solution, a set of harmonized procedures
consistent with the other European regions already in coupling operations. The PCR solution is
used to connect the power markets across Europe and it prepares grounds for smooth future
integration of the CEE region and the rest of Europe.
Softs and
Metals
On November 19, 2014, 4M Market Coupling (4M MC) was successfully launched,
integrating the markets of OTE in Czech Republic, HUPX in Hungary, OPCOM in Romania, and
OKTE in Slovakia. The 4M MC, as extended by Romania, replaced the Trilateral Coupling, in
operation since 2012 between Czech Republic, Hungary, and Slovakia, and is considered as
an intermediate step towards the single European day-ahead market.
Other
The PCR solution will generate many new data points for the European electricity market. ZEMAs advanced data
collection capabilities will ensure that market participants remain up to date on new developments, since ZEMA already
collects over 2,000 electricity records. To learn more about how ZEMA simplifies the data collection process,
visit http://www.ze.com/the-zema-suite/.
Data
Vendors
In Depth
November 2014
Market
Analysis
On November 18, 2014, Thomson Reuters launched Power Brazil, a new forecast
model tool for the energy market in Brazil that includes Thomson Reuters Hydro Balance
analysis. Based on its knowledge and experience from global power markets, Thomson Reuters
Commodities Research & Forecasts hydrological model expands coverage to all major Brazilian
hydro power regions, enabling sector traders to gain greater intelligence and insight into local
energy markets.
Summary
Editorial
The product offering also provides proprietary electric consumption, wind generation, and
power outage forecasts for the Brazilian power system.
Power
The Hydro Balance (HB) is an index that describes the total potential for hydro power
production in the long and short term. While the measurement of reservoir content only
describes the situation next to the power plants, the HB incorporates other natural variables
which influence the hydro power system and thus gives traders an increased understanding of
what to expect in the long run.
Petroleum
Nat Gas
PJM Interconnection (PJM) and the New York Independent System Operator (NYISO) are
streamlining the flow of electricity across their mutual borders. The new Coordinated
Transaction Scheduling (CTS) system, effective November 4, 2014, has improved the
scheduling of wholesale electricity between New York State and the PJM regions where they
border Pennsylvania and New Jersey. This solution was designed to help market participants
access the least expensive source of power within the two regions; it helps lower the
combined energy production cost of the two systems.
Coal
Softs and
Metals
CTS is among other initiatives that the NYISO and PJM have undertaken to improve
interregional scheduling practices and power flows, some of which include intra-hour
transaction scheduling and coordinating operations to cost-effectively solve transmission
system constraints.
See the original announcement.
Finance
Other
On November 3, 2014, Nodal Exchange announced that it has formed a wholly owned subsidiary, Nodal Clear, which will soon submit an application to the US Commodity Futures Trading
Commission (CFTC) to be registered as a derivatives clearing organization (DCO).
Data
Vendors
Since its launch in April 2009, all Nodal Exchange contracts have been cleared by LCH.
Clearnet Limited (LCH. Clearnet). Nodal Exchange contracts will continue to be cleared by
LCH.Clearnet until a transition to Nodal Clear is completed. This transition is planned for fall
2015 pending regulatory approval of Nodal Clear.
See the original announcement.
In Depth
November 2014
Market
Analysis
For more information on the North American electricity market, view ZEMA, ZEs data management solution for electricity
market participants, at http://www.ze.com/the-zema-solutions/data-coverage/.
Editorial
On November 24, 2014, the New York Mercantile Exchange (NYMEX) revised the names and
sizes for the two electricity futures contracts listed below:
Summary
Power
Code
Chapter
HM
776
HJ
776A
Coal
Softs and
Metals
Finance
Nat Gas
The subject contracts are listed for trading on CME Globex and the NYMEX trading floor, as well
as for submission for clearing through CME ClearPort. The trading hours for open outcry are
Monday Friday 9:00 a.m. 2:30 p.m. New York Time/NYT (8:00 a.m. 1:30 p.m. Chicago
Time/CT). The hours for CME Globex and CME ClearPort are Sunday Friday 6:00 p.m.
5:15 p.m. NYT (5:00 p.m. 4:15 p.m. CT) with a 45-minute break each day beginning at
5:15 p.m. NYT (4:15 p.m. CT).
Petroleum
The amendments were implemented so that the contracts rules reflect standard cash
market trading practices. The sizes of the MISO Michigan Hub Peak Calendar-Month LMP
Futures (Code HM, Chapter 776) and MISO Michigan Hub Off-Peak Calendar-Month LMP
Futures (Code HJ, Ch. 776A) are being adjusted to a flow rate of 5 megawatts (MW) per hour.
Specifically, the size of the MISO Michigan Hub Peak Calendar Month LMP Futures will change
from 2.5 MW multiplied by the number of peak hours in the contract month to 80 megawatt
hours (MWh). The size of the MISO Michigan Hub Off-Peak Calendar Month LMP Futures will
change from 2.5 MW multiplied by the number of off-peak hours in the contract month to 5 MWh.
95 contracts
100 contracts
4 contracts
Data
Vendors
Product Title
Other
On November 24, 2014, NYMEX modified its block trade minimum threshold for the following
electricity futures and options contracts:
Market
Analysis
In Depth
November 2014
Summary
Power
Editorial
As of November 13, 2014, the Electric Reliability Council of Texas (ERCOT) updated its
free ERCOT Energy Saver mobile app to improve access to information about electricity
demand, generation and available reserves, updated in five-minute intervals. The ERCOT
Energy Saver mobile app allows consumers to access real-time electric grid and marketing
conditions from their mobile devices.
Nat Gas
The app also continues to offer wholesale prices for each load zone and other information
about ERCOT, the grid and the competitive electric market.
See the original announcement.
Coal
Softs and
Metals
The ZEMA graph below shows hourly ERCOT Nodal Day Ahead LMP pricing from
November 16, 2014 November 24, 2014. The data is represented in $USD/MWh and has
a range from a low of around $20 USD/MWh to a high of over $180 on November 18, 2014.
The data is collected directly from an ERCOT Nodal report. The rise and fall of prices correlates
mostly with on and off-peak hours of electricity usage.
Finance
Other
Data
Vendors
Market
Analysis
11
In Depth
November 2014
Summary
Editorial
Petroleum
Power
Nat Gas
These new assessments will be launched under the names Gasoil EFS, Gasoil ESS, and
Gasoil Frontlines, spanning 12 calendar months and three quarters. The assessed
derivatives are differentials between FOB Singapore 500 ppm paper, ICE gasoil futures (EFS),
and the ICE gasoil frontline swap (ESS).
See the original announcement.
Coal
ZEMA combines strengths in oil market data collection, visualization, and analysis, equipping traders and analysts to
make informed business decisions. To learn more, book a complimentary ZEMA demonstration.
Data
Vendors
Market
Analysis
Effective November 1, 2014, Platts began publishing the official selling price for Libyas
Mesla crude. In so doing, Platts now publishes a complete portfolio of Libyas crude export
slate. Mesla crude OSP will be published on a monthly basis as received from the Libyan
National Oil Corporation.
See the original announcement.
12
In Depth
To learn more about Libyan crude oil prices, use ZEMA to view reports from Platts. To learn more,
visit http://www.ze.com/the-zema-solutions/.
November 2014
Other
Finance
Effective November 24, 2014, Platts listed a new clean Medium Range tanker freight rate
assessment reflecting flows from US Gulf Coast to North Brazil. This assessment reflects the
US Gulf Coast to North Brazil route for a clean MR tanker carrying a cargo of 38,00mt and
reflects loadings from Houston and New Orleans and discharge at ports including Manaus,
Belem, and Sao Luis. The new assessments purpose is to capture newly established supply
trends of refined products out of the region following significant structural changes to the US
oil industry and would reflect modern MR tonnage.
Softs and
Metals
Market ID
221
Description
ANS (Alaska North Slope)
Editorial
On December 1, 2014, Argus added the following new market to its Forward Curves
data module. This new market was introduced with effect from November 1, 2014.
Summary
Petroleum
Power
Argus Adds New Gulf Coast Markets to Its Refined Products Module
On November 21, 2014, Argus introduced the following new markets to its Forward
Curves publication and the Refined Products data module:
Description
Gulf Coast naphtha 40N+A
Gulf Coast naphtha full range
Gulf Coast naphtha LSR (light straight run)
Gulf Coast natural gasoline
Gulf Coast gasoline waterborne conventional 87 octane
Gulf Coast gasoline Colonial pipeline conventional 93 octane
Gulf Coast reformate
Gulf Coast alkylate
Nat Gas
Coal
Market ID
207
208
209
210
211
212
213
214
See the original announcement.
Softs and
Metals
PA Code
Unit
Finance
CNY/t Weekly
PA0015265 0
CNY/t Weekly
PA0015266 0
USD/t Weekly
PA0015266 0
USD/t Weekly
Data
Vendors
Other
PA0015265 0
Market
Analysis
13
In Depth
November 2014
Time Price
Stamp Type
Continuous
Description
Forward
PA0015260
Fortnightly
PA0015260
Fortnightly
Unit
Editorial
PA Code
Summary
On November 5, 2014, Argus added a new fortnightly assessment for winter diesel cpt Aktau
USD/t to its Argus Caspian Market report. Relevant codes appeared in the DARK file of the
DARK folder on server ftp.argusmedia.com.
Petroleum
Frequency
Power
Listing Schedule
First
Block
Minimum
Value
Contract
Listed
Trade
Price
Per
Size
Contract
Minimum
Fluctuation
Tick
Month
Threshold
Jan-15
$10
LWB/
LWB
LLS
(Argus)
vs. WTI
BALMO
Futures
CPC/Floor/GLBX: One
month and the following
1000
month listed 10 business
barrels
days prior to the start of the
contract month
$0.01
Jan-15
$10
$0.01
Jan-15
$10
1000
barrels
Market
Analysis
Data
Vendors
$0.01
Other
CPC/Floor/GLBX: One
month and the following
1000
month listed 10 business
barrels
days prior to the start of the
contract month
Finance
LBB/
LBB
LLS
(Argus)
vs. Brent
BALMO
Futures
14
In Depth
November 2014
Softs and
Metals
Product
Product
Code
Name
CPC/
Globex
Coal
On December 8, 2014, the New York Mercantile Exchange (NYMEX) will list three new
cash-settled Louisiana Light Sweet (LLS) crude oil futures on the NYMEX trading floor and
Chicago Mercantile Exchange (CME) Globex. These contracts will be available for submission
for clearing through CME ClearPort. New futures may also be block traded.
Nat Gas
Summary
Editorial
Petroleum
The ZEMA graph below displays monthly Brent Crude Last Day Futures with a forecast date
of November 21, 2014. This data is collected from CME. Extending from January 2015 until
November 2016, the graph shows a steady increase in oil pricing ranging from approximately
$80 USD/bbl to $87 USD/bbl, as shown by the orange threshold filter.
15
In Depth
November 2014
Market
Analysis
Effective November 24, 2014, NYMEX listed a cash-settled Canadian Heavy Crude Oil
BALMO Futures (code CHB) for trading on the NYMEX trading floor and CME Globex. This listing
can be submitted for clearing via CME ClearPort.This new balance-of-month contract is listed
for two consecutive months.
CHB
Chapter
1088
Settlement Type
Financial
Contract Size
1,000 barrels
Termination of Trading
Trading shall cease on (1) Canadian business day prior to the Notice of
Shipments (NOS) date on the Enbridge Pipeline. The NOS date occurs on or
about the 20th calendar day of the month, subject to confirmation by
Enbridge Pipeline.
$0.001
Nat Gas
Minimum Price
Fluctuation
Final Settlement
Price Tick
Power
Commodity Code
Editorial
Summary
Contract Name
Petroleum
$0.001
January 2015
Listing Convention
Two Months
Coal
Softs and
Metals
ZEMA collects a range of NYMEX crude futures data, including data from the NYMEX Futures Reference file and the
NYMEX Futures Settlement report for petroleum and other liquids. To receive a complimentary ZEMA demonstration, visit
http://www.ze.com/book-a-demo/.
LM1
June 2016
December 2016
LM2
June 2017
December 2017
LM3
June 2018
December 2018
LM4
June 2019
December 2019
LM5
June 2020
December 2020
16
In Depth
November 2014
Market
Analysis
Data
Vendors
Mid-Curve Option
Other
CME listed five consecutive mid-curve options that expire on a June-December cycle. For the
Jun 2015 Crude Oil Mid-Curve Option, there are five mid-curve options exercised as follows:
Finance
Effective November 24, 2014, NYMEX listed Crude Oil Mid-Curve Option contracts
(code LM) for trading on the NYMEX trading floor and CME Globex as well as for submission for
clearing via CME ClearPort.
Option Style
American
Underlying Futures
Termination of Trading
Trading shall cease three business days before the termination of trading in
the underlying futures contract
Minimum Price
Fluctuation
$0.01
Strike Prices
Twenty strike prices in increments of $0.50 per barrel above and below the
at-the-money strike price; and additional ten strike
prices in increments of $2.50 per barrel above and below the
highest and lowest fifty-cent increment as described before.
June 2015
Settlement Type
Coal
468
Nat Gas
Chapter
Power
LM
Editorial
Commodity Code
Summary
Petroleum
Contract Name
Softs and
Metals
Finance
The new refined product futures contracts, subject to completion of relevant regulatory
processes, will be available for trading at ICE Futures Europe and cleared at ICE Clear Europe.
Contract Specifications:
Gulf Coast Unl 87 Gasoline Prompt Pipeline (Platts) vs. RBOB Gasoline 1st Line Balmo Future
Other
Gulf Coast Unl 87 Gasoline Prompt Pipeline (Platts) vs. RBOB Gasoline 1st Line Future
See the original announcement.
Data
Vendors
ZEMA, ZEs data management solution, collects many ICE records. To learn more about how ZEMA can collect,
aggregate, and analyze data, book a complimentary ZEMA demonstration now at http://www.ze.com/book-a-demo/.
17
In Depth
November 2014
Market
Analysis
On November 20, 2014, the Energy Information Administration (EIA) released a new
US Crude Oil Import Tracking Tool that allows policymakers, analysts, and the public to more
easily track trends in crude oil imports. Users can sort and display crude oil imports by month
or year, by crude type (i.e., light, medium, heavy), country source, port of entry, processing
Power
ZEMA collects nearly 300 records from the EIA, many of which contain oil market data. To learn more about ZEMAs vast
data library, visit http://www.ze.com/the-zema-solutions/data-coverage/.
Editorial
Summary
The tool attempts to shed light on the adjustments to imports being made in response to
growing production of crude oil within the United States.
Petroleum
company, processing refinery, and more. The tool features graphing and mapping capabilities
and a built-in help function.
Effective November 30, 2014, GFI Group Inc. announced that it will offer block
future services of Crude Oil, Natural Gas, and Refined Products block futures on its
EnergyMatch platform. Energy options will also be added in early 2015.
See the original announcement.
Nat Gas
Coal
On May 1, 2015, Platts will cease publishing its daily spot assessment of marine diesel
oil (MDO) delivered in Valparaiso, Chile. This discontinuation reflects a shift in the Chilean
market away from marine diesel oil, towards marine gasoil (MGO).
Platts will continue to publish a daily assessment of MGO delivered to Valparaiso, Chile.
Softs and
Metals
The MDO assessment is currently published on Platts Global Alert page 870, in
Platts Bunkerwire, and in the Platts price database under code AANUA00.
See the original announcement.
Data
Vendors
Other
Effective January 2, 2015, Platts will discontinue its Northwest European dioctyl phthalate
assessments while continuing its price assessments for other oxo-alcohols. The decision was
made following a comprehensive review of feedback where Platts has decided to reconsider
its initial proposal published August 7 to also discontinue price
assessments for other oxo alcohols including: normal butanol, iso-butanol, 2-ethly-hexanol,
and phthalic anhydrideand will continue to publish weekly assessments for each product.
Finance
Market
Analysis
Effective January 2, 2015, Platts will discontinue its Q1 and Q2 CIF ARA benzene
assessments as published on page PCA60 and found under the following codes in the
Platts price database:
Benzene CIF ARA Q1 USD AAIBN00 Monthly Average: AAIBO00
18
In Depth
November 2014
Effective November 3, 2014, Platts discontinued Gasoil 0.1% and Fuel Oil 3.5% from its
power and gas cross-fuels comparisons tables. The calculations were discontinued from the
Generating Fuel Cost Comparisons and Cross Fuel Comparisons tables published in European
Power Daily and European Gas Daily.
Power
Editorial
Summary
Also, following a review of feedback, Platts has reconsidered its original April 6 proposal on
the subject and is now discontinuing its T2 FOB ARA toluene assessment and will continue to
publish daily assessments.
Petroleum
Platts continues to publish fuel cost comparisons for Fuel Oil 1%.
Nat Gas
Coal
Softs and
Metals
Finance
Other
Market
Analysis
The ARPEL postings are currently published in full each day on Platts Global Alert page 474,
with a smaller section published daily in Platts Latin American Wire. All of the postings are
also in the Platts price database under data codes beginning with ARP.
19
In Depth
Data
Vendors
On November 31, 2014, Platts announced that by the end of 2014, it will cease
publishing consumer price postings in Latin America that have been gathered by the
Association Regional de Empresas del Sector Petroleo (ARPEL). This discontinuation reflects a
diminished appetite for this data from Platts subscribers.
Listing Schedule as
of November 10,
2014 CPC, Globex,
and NX Pit
Monthly contracts up
to and including
December 2014
Power
Contract Months
Delisted as of
November 10, 2014
January 2015 contract
month and beyond
Monthly contracts up
January 2015 contract
to and including
month and beyond
December 2014
Coal
Monthly contracts up
January 2015 contract
to and including
month and beyond
December 2014
Nat Gas
Monthly contracts up
January 2015 contract
to and including
month and beyond
December 2014
Softs and
Metals
Monthly contracts up
January 2015 contract
to and including
month and beyond
December 2014
Finance
Listing Schedule
Commodity
Prior to November 10,
Contract Title
Code and Rule2014 CPC, Globex,
book Chapter
and NX Pit
CPC/Globex
Low Sulphur
Current year + 4
Gasoil Average LSO/252
Price Option
Globex 12 months
Low Sulphur
CPC/Globex
Gasoil (100mt)
Current year + 4
LSM/309
Calendar Month
Globex 12 months
Futures
Low Sulphur
CPC/Globex
Gasoil (100mt)
Current year + 4
LSM
Penultimate
Globex 12 months
Day Futures
Singapore
CPC/Globex
Gasoil (Platts)
Current year + 4
LSS/295
vs. Low Sulphur
Globex 12 months
Gasoil Futures
ULSD 10ppm
CPC/Globex
Cargoes CIF
Current year + 4
Med (Platts) vs. LSL/372
Low Sulphur
Globex 12 months
Gasoil Futures
Editorial
More specifically, NYMEX delisted from trading previously listed contract months for the five
contracts listed below:
Summary
Effective November 10, 2014, NYMEX has delisted from trading previously listed contract
months for seven low sulphur Gasoil based futures and options contracts. There was no open
interest in the delisted contract months.
Petroleum
Other
20
In Depth
November 2014
Market
Analysis
Platts proposes to reduce the ethyl-benzene content to a maximum of 20%, eliminate the
limits on metaxylene, paraxylene and orthoxylene and reduce the non-aromatics content to
2% maximum to better reflect industry standards.
Data
Vendors
Effective January 2, 2015, Platts will edit the specifications for its FOB ARA solvent and
isomer/virgin-grade mixed xylenes assessments. Platts currently assesses solvent-grade
mixed xylenes that conforms to ASTM 843 standards, with a maximum ethyl-benzene content
of 55-60%, non-aromatics content of 4% maximum and metaxylene, paraxylene, and
orthoxylene content at a maximum of 15-20%.
Editorial
Power
Summary
Platts invites feedback surrounding all aspects of this methodology enhancement including
but not limited to the prevailing industry standard of a bromine content of maximum 20 ppm
on both grades.
Petroleum
Platts assesses virgin/isomer-grade mixed xylenes that conforms to the ASTM 843 standards,
with a maximum ethylbenzene content of 20%, a non-aromatics content of 1% maximum and
a minimum paraxylene content of 18%. Platts proposes to increase the non-aromatics
content to 2% maximum to better align its solvent and virgin/isomer grades.
Coal
Nat Gas
Effective December 1, 2014, Platts has based its assessments on full cargoes for Malaysias
Tapis crude oil and Indonesias Minas crude oil. Platts will also discontinue the use of the
partials mechanism to assess Minas and Tapis. Instead, Platts will publish bids, offers, and
transactions for full parcels of either grade. Further, Platts will amend the cargo size
reflected in these grades to 100,000 barrels for Minas (down from 200,000 barrels
currently) and 300,000 barrels for Tapis (down from 450,000 barrels currently), in line with
existing trade in these grades. These changes reflect evolving dynamics in Southeast Asias
crude oil markets.
Softs and
Metals
Finance
Time
Continuous
Price Type
Description
Stamp
Forward
Unit
Frequency
17
USD/t Daily
PA0012304 6
17
USD/t Daily
PA0012305 6
17
USD/t Daily
21
In Depth
November 2014
Market
Analysis
PA0012303 6
Data
Vendors
PA Code
Other
On December 12, 2014, Argus will cease publishing the following assessments. These
assessments are currently found in Argus DeWitt Toluene and Xylenes Daily. Changes apply to
information in the dtxdaily data files in the /DTXDaily folder of server ftp.argusmedia.com.
Frequency
PA0015262
17
USD/t
Daily
PA0015263
17
USD/t
Daily
PA0015264
17
Daily
Power
Unit
Editorial
Summary
PA Code
Petroleum
Argus will replace these codes with the following codes, which began to be published on
November 7, 2014:
On November 24, 2014, NYMEX introduced block trading for the following contracts:
Block Trade Minimum Threshold
5 contracts
5 contracts
Coal
Product Title
Softs and
Metals
Product
Code CPC/ Product Name
Globex
Rulebook
Current Listing Schedule
Chapter
1 month
1 month
OS/OSX
376
Market
Analysis
ZA/ZAY
Data
Vendors
CPC/Floor/GLBX: 12 months
Other
NEW CME
Globex Listing
Schedule
18 months
22
In Depth
Finance
Effective November 27, 2014, NYMEX amended the CME Globex listing cycles of the following
four energy options contracts:
Deliveries from Transcontinental Gas Pipe Line on the 30-inch, 36-inch and 42-inch lines
from the Georgia/South Carolina border to the Virginia/Maryland border. Deliveries into
Transco at the Pleasant Valley receipt point near Fairfax, Virginia, from Dominions Cove Point
LNG terminal are not included.
Coal
The new monthly location will appear in the Northeast section of the Market Center Spot Gas
Prices table in Inside FERCs Gas Market Report and Platts Natural Gas Alert pages 433 and 495.
Additionally, the new listing will appear in the Northeast section of the Market Center Bidweek
Physical Basis Prices table in Inside FERCs Gas Market Report.
Petroleum
Power
The description for the daily spot gas point as published in the Platts methodology and
specifications guide is as follows:
Editorial
This new listing will cover late December bidweek trading for January delivery. Trading in the delivered
monthly market in Transcos Zone 5, which extends from the Georgia/South Carolina border to the
Virginia/Maryland border, has demonstrated a level that supports a robust pricing location. Platts
already publishes daily spot gas prices for this location.
Summary
On January 2, 2015, Platts will add to its monthly bidweek listing Transcontinental Gas
Pipeline Corp. Zone 5 delivered.
Natural Gas
Softs and
Metals
The graph below illustrates Henry Hub Natural Gas Futures data from December 2014 to
November 2015 with a forecast date of November 21, 2014. With a high of $4.4 USD/
MMbtu in January 2015, to a low of $3.7 USD/MMbtu in May 2015, pricing generally
decreases between the period of January 2015 to May 2015. This data is collected from
forward curve analyses from a CME data report.
Finance
23
In Depth
November 2014
Coal
There will be no change to the existing Platts listing for Transco, Zone 6 non-New York, which is
composed of all non-New York delivered transactions both north and south of Station 195.
Petroleum
To bring more transparency to the pricing region, Platts is adding a listing for the northern
portion of Transcos Zone 6 non-New York, which will be composed of only transactions
delivered from Transco to markets and interconnects north of Station 195 in York,
Pennsylvania, excluding deliveries in the Leidy Hub area and to New York citygates
downstream of Linden, New Jersey.
Power
Platts new listings cover late December bidweek trading for January delivery, as well as
January 3-5 for the daily market, covering trade date January 2. In the non-New York portion of
Transcos Zone 6, which extends from the Virginia/Maryland border to markets south of
Linden, New Jersey, price values have bifurcated since last winter, with delivered values on
the capacity-constrained portion of the zone south of Station 195 at the Maryland/
Pennsylvania border rising well above those north of the station.
Editorial
On January 2, 2015, Platts will add to its daily and monthly bidweek price surveys
sub-listings for Transco Zone 6, non-New York North.
Summary
Natural Gas
Manage North American natural gas data with ease using ZEMAs data collection, validation, analytic, and visualization
functionalities. To learn more, book a complimentary ZEMA demonstration.
Market
Analysis
24
In Depth
On November 21, 2014, Argus added new assessments to its Argus International LPG
publication and data feed. These series can also be found in the dpgus and dpg data file in
the /DLPG folder of server ftp.argusmedia.com.
November 2014
Data
Vendors
Other
The proposed Transco Zone 6 non-NY North listings will appear in the Northeast section of
the Market Center Spot Gas Prices table in Inside FERCs Gas Market Report, Energy Trader, and Gas Daily Price Guide, as well as in the Citygates section of Gas Dailys Daily price
survey table, and Platts Natural Gas Alert pages 433, 495, and 516. Additionally, the new
listings will appear in the Northeast section of the Market Center Bidweek
Physical Basis Prices table in Inside FERCs Gas Market Report.
Finance
Deliveries from Transcontinental Gas Pipe Line from Station 195 in York, Pennsylvania, to the
Linden, New Jersey, compressor station and on the Leidy Line south of Clinton County,
Pennsylvania. The non-New York North point does not include deliveries to Public Service
Electric and Gas in New Jersey, whose supply is taken downstream of Linden.
Softs and
Metals
Frequency
USC/USG Daily
PA0008797 2
PA0008798 2
PA0008799 2
PA0008800 2
PA0008801 2
PA0008802 2
PA0009967 2
USC/USG Daily
Power
USC/USG Daily
USC/USG Daily
Petroleum
USC/USG Daily
Editorial
PA0008796 2
Summary
Unit
Nat Gas
USC/USG Daily
USC/USG Daily
USC/USG Daily
Coal
Unit
Frequency
USC/USG Daily
PA0015271 2
USC/USG Daily
PA0015272 2
USC/USG Daily
PA0015273 2
USC/USG Daily
PA0015274 2
USC/USG Daily
PA0015275 2
USC/USG Daily
25
In Depth
November 2014
Market
Analysis
Data
Vendors
Other
PA0015270 2
Finance
PA Code
Softs and
Metals
On November 17, 2014, Argus added new series to its Argus NGL Americas
data module. Changes applied to information in the dngl file in the DNGL folder of
server ftp.argusmedia.com.
Unit
Frequency
PA0015277 2
PA0015278 2
PA0015279 2
PA0015280 2
PA0015281 2
Power
Editorial
PA0015276 2
Summary
Nat Gas
PA Code
USC/USG Daily
Petroleum
Coal
ZEMAs advanced data collection, validation, and dashboard reporting functionalities help natural gas market
participants gain enhanced business intelligence. To learn more, book a complimentary ZEMA demonstration.
Softs and
Metals
Frequency
Euro/MWh
Daily
Euro/MWh
Daily
Euro/MWh
Daily
Other
PA0015255 6
Unit
ZEMAs natural gas market data management solution easily integrates relevant information with a wide range of CTRM
and ETRM systems. To learn more, book a complimentary ZEMA demonstration.
Market
Analysis
CME Lists New Columbia, Dominion, South Point, and Texas Eastern
Zone M-3 Natural Gas Options
Data
Vendors
26
In Depth
Effective November 24, 2014,the New York Mercantile Exchange, Inc. (NYMEX) listed the
following new financially settled natural gas option contracts:
November 2014
Finance
CFS
DPP
760
DSF
761
Z5P
These new contracts will remain listed for one month on Chicago Mercantile Exchange (CME)
Globex and for 36 consecutive contract months on the NYMEX trading floor. They are available
for submission for clearing through CME ClearPort.
Petroleum
Power
759
Editorial
Summary
Underlying
Futures
Nat Gas
Option Contract
Option
Option
Rule
Underlying Futures Contract
Code
Chapter
27
In Depth
November 2014
Market
Analysis
ZEMA collects many ICE reports. To learn more about how ZEMA can collect, aggregate, and analyze data, book
a complimentary ZEMA demonstration now at http://www.ze.com/book-a-demo/.
Data
Vendors
Other
The introduction of Belgian ZTP futures contracts follows recent enhancements to the
existing ICE Endex ZTP offering. ICE Endex has an established high calorific ZTP gas spot
market, and in August the Belgian spot product suite was extended with contracts for delivery
of low calorific gas on the ZTP. By also offering a low calorific gas spot market, ICE Endex has
been able to extend the location spread for market participants, which now includes the
TTF-ZTP low calorific gas qualities, as well as the Belgian high and low calorific gas qualities
(ZTP and ZTPL).
Finance
The ZTP futures are physically delivered and complement ICE Endexs existing spot market,
which also serves as the Belgian gas balancing market. ZTP futures contracts are available to
trade on the ICE trading platform and are cleared by ICE Clear Europe, alongside ICE Futures
Europes broad energy offering which includes benchmarks in oil, natural gas, coal and emissions.
Softs and
Metals
Futures on the Belgian Zeebrugge Trading Point (ZTP) have been developed in conjunction with
Fluxys Belgium, Belgiums natural gas transmission system operator, which currently performs
balancing actions on the within day and day ahead ZTP spot markets operated by ICE Endex.
Along with the ZTP futures, locational spread contracts between the Dutch Title Transfer
Facility (TTF) and the Belgian ZTP gas futures markets will also be provided by ICE Endex.
Coal
Effective November 4, 2014, Intercontinental Exchange (ICE) has released Belgian ZTP
Natural Gas Futures contracts through ICE Endex. The first Belgian gas futures contract offered
for trading is the December 2014 contract and the contracts extend through January 2017.
Product Title
15 contracts
Power
Dominion, South Point Natural Gas (Platts IFERC) Pipe Option 15 contracts
Editorial
On November 24, 2014, NYMEX introduced block trading for the following products:
Summary
Nat Gas
Texas Eastern Zone M-3 Natural Gas (Platts IFERC) Pipe Option 15 contracts
See the original announcement.
Petroleum
Coal
IA/IAY
Softs and
Metals
Henry Hub
Natural Gas
391
Calendar
Spread Option
1 month
NEW CME
Globex Listing
Schedule
Finance
Other
Data
Vendors
Market
Analysis
28
In Depth
November 2014
Summary
Coal
Editorial
Power
Petroleum
Nat Gas
On January 2, 2015, Platts will change the calorific value basis of its weekly 90-day Russian
Baltic 6,400 kcal/kg GAR and Poland Baltic 6,300 kcal/kg GAR thermal coal price
assessments to 6,000 kcal/kg NAR.
Platts will do so because it claims the new calorific value is closer to most of thermal coal
bought by European buyers, particularly into Amsterdam-Rotterdam-Antwerp.
See the original announcement.
Softs and
Metals
The ZEMA graph below illustrates the change in the average weekly production of coal in the
US from November 2009 until November 2014. Ranging from approximately a 15 Mt low in
December 2009 to a 20 Mt high in December of 2011, production had the most volatility
during the period 2010-2012 within the last 5 years. This data is retrieved from an EIA report.
Finance
29
In Depth
November 2014
Summary
Editorial
Power
SOFTS
Platts to Publish Singapore Time Sugar Futures Assessments
Petroleum
On November 17, 2014, Platts announced that it will soon begin publishing
16:30 Singapore time assessments of Intercontinental Exchange (ICE) Sugar No. 11 futures
and ICE White Sugar futures (LIFFE 5). The assessments will include the first three contracts
listed by the exchange for each futures contract from the date of publication.
Nat Gas
Platts will maintain a rolling schedule in line with the ICE expiration schedules for each
futures contract.
Coal
This proposal accompanies changes being discussed to reflect the daily market value at
16:30 Singapore time for a range of Thai sugar assessments. The Thais currently stamp an
assessment of sugar futures at 16:30 London time.
See the original announcement.
ZEMA, a market data management solution for agricultural industry participants, collects real-time information about
commodity prices and transforms this into sophisticated forward curve analyses. To learn more, book a complimentary
ZEMA demonstration.
Finance
PA-code
Continuous
Description
forward
Start date
Frequency
05-Nov-2014 Weekly
PA0006549 4
05-Nov-2014 Weekly
PA0009425 4
05-Nov-2014 Weekly
PA0009425 4
05-Nov-2014 Weekly
30
In Depth
November 2014
Market
Analysis
Data
Vendors
PA0006549 4
Other
On November 5, 2014, Argus introduced several new assessments to the Argus Biomass
report and data module. These changes apply to the dabm files in the DABM folder on ftp.
argusmedia.com.
Start date
Frequency
05-Nov-2014 Weekly
PA0011613 4
05-Nov-2014 Weekly
PA0011614 4
05-Nov-2014 Weekly
PA0011614 4
05-Nov-2014 Weekly
PA0011616 4
05-Nov-2014 Weekly
PA0011616 4
05-Nov-2014 Weekly
PA0011916 4
05-Nov-2014 Weekly
PA0011916 4
05-Nov-2014 Weekly
Coal
Nat Gas
PA0011612 4
Petroleum
05-Nov-2014 Weekly
Power
Editorial
PA0011612 4
Summary
Continuous
Description
forward
PA-code
PA-Code
USC/RIN
Daily
USC/RIN
Daily
USC/RIN
Daily
USC/RIN
Daily
USC/RIN
Daily
USC/RIN
Daily
USC/RIN
Daily
USC/RIN
Daily
USC/RIN
Daily
Market
Analysis
Data
Vendors
Frequency
Other
Unit
31
In Depth
November 2014
Description
Finance
On November 3, 2014, Argus added several new assessments to its Argus Americas
Biofuels publication and Argus US West Coast Products publication. New series were added
to the duse file in the DUSEthanol folder and the duswcprod file in the DUSWCPROD folder of
server ftp.argusmedia.com. The assessments have time stamps of 2; are price types 1, 2, and
8; and have a continuous forward rate of 0.
Frequency
USC/RIN
Daily
USC/RIN
Daily
USC/RIN
Daily
USC/RIN
Daily
Power
Editorial
Unit
Summary
Description
PA-Code
ZEMA is equipped with advanced data collection capabilities, and has the capacity to collect all biofuel information
generated by Argus. To learn more, visit http://www.ze.com/the-zema-solutions/.
Petroleum
Nat Gas
Coal
Finance
Custom watchlists
Weather conditions, forecasts, maps, and agriculture-specific data by location
Cash grain bids from local and regional elevators
Other
Market
Analysis
Effective November 3, 2014, CBOT delisted the April 2015 contract month for the Urea
(Prilled) FOB Yuzhny Swaps (Clearing Only) contracts. As such, the last contract month
available for submission for clearing via CME ClearPort is April 2015. As published in SER
#7203, the listing cycle for Urea (Prilled) FOB Yuzhny Swaps (Clearing Only) Contract has been
reduced from 12 consecutive months to six consecutive months. Accordingly, the May 2015
contract will be listed after the expiration of the November 2014 contract.
Data
Vendors
In Depth
November 2014
Petroleum
The weekly assessment will be made on Friday or the closest business day and time stamped
to 16:30 London time.
Power
The assessment will normalize to 3 mm thick and up to 1.8 meter wide S275 hot rolled coil.
The minimum order size will be 100 mt, with a maximum 500 mt, and the delivery window will
be two to six weeks from the date of publication.
Payment terms will be normalized to net-40 days, with the assessment in GBP/mt.
Editorial
On December 5, 2014, Platts will launch a new weekly assessment covering the UK hot
rolled coil market. The price assessment for HRC DDP UK will normalize to delivered duty paid
West Midlands; it will capture prime imported and domestically produced material, as well as
port stocks.
Summary
METALS
Nat Gas
Coal
The ZEMA graph below shows CME Iron Ore Futures Settlement Pricing Data with a forecast
date of November 21, 2014. The graph illustrates pricing from November 2014 until
November 2016. Pricing ranges from $74 USD/t in November 2014 to $66 USD/t in
November 2016. This data is collected from forward curve analysis from a CME data report.
Finance
Other
The analysis consists of a related set of commodity prices that Platts publishes daily:
STCBM00 Rebar FOB Turkey, FETKD00 Ferrous Scrap 80:20 CFR Turkey, and STBLB00 Billet
33
In Depth
November 2014
Market
Analysis
On December 1, 2014, Platts launched a new series of daily data analysis identifying market
trends in the Turkish rebar billet and scrap markets. The Platts Turkey ARC Steel Tracker
(Turkey ARC) has been designed to analyze price relationships of inputs and outputs of
regional electric arc furnaces and rolling mills, and daily index and monetary values are
proposed for each commodity and the market in general.
Data
Vendors
Petroleum
Commodity Code
Iron Ore 58% Fe, Low Alumina, CFR China (TSI) Futures TIC
Coal
Effective December 7, 2014, for trade date December 8, 2014, and pending all
relevant Commodity Futures Trading Commission (CFTC) regulatory review periods, the
New York Mercantile Exchange, Inc. (NYMEX) will list the following new iron ore futures contract
for trading on Chicago Mercantile Exchange (CME) Globex, the NYMEX trading floor, and for
submission for clearing through CME ClearPort.
Nat Gas
Product Name
Power
Editorial
Summary
FOB Black Sea (given an adjustment factor based on freight rates to allow for a net-forward
CFR Turkey billet value to be created).
Contract Size
Termination of Trading
Last business day of the contract month. Business days are based on the
Singapore Public Holiday calendar.
$5.00
Listing Convention
CME Globex, CME ClearPort and Open Outcry: Monthly contracts listed for
the current year and the next two years
January 2015
Data
Vendors
Iron Ore 58% Fe, Low Alumina, CFR China (TSI) Futures
Other
Contract Name
Finance
Also concurrent with the launch of this contract and pending all relevant CFTC regulatory
review periods, the Exchange will permit block trading pursuant to Rule 526 (Block Trades) in
this contract at a block trade minimum threshold of ten (10) contracts.
Market
Analysis
34
In Depth
November 2014
Petroleum
Nat Gas
Aggregated gold bids and offers will be published in real-time with the imbalance calculated
and the price updated every 30 seconds. IBA will use the WebICE technology platform which
will allow direct participants as well as sponsored clients to manage their own orders in the
auction in real time via their own screens.
Power
The LBMA Gold Price will replace the Gold Fixing Price, which has been in existence since
September 1919. The price is set in London twice a day and provides a published benchmark
price that is widely used as an international pricing medium by producers, consumers,
investors and central banks. As the new administrator for the LBMA Gold Price, IBA will
transition to a physically settled, electronic and tradable auction, with the ability to participate
in three currencies: USD, EUR and GBP.
Editorial
Summary
IBA will assume overall responsibilities for the London Gold Price as follows:
Coal
Finance
A fair and sustainable fee structure, designed to encourage direct participation from a
diverse cross-section of market participants and broad use of the price as a benchmark
See the original announcement.
Other
ZEMA collects 75 metal records, many of which contain data about gold specifically. To learn more about ZEMAs data
coverage, visit http://www.ze.com/the-zema-solutions/data-coverage/.
By the end of Platts first quarter of 2015, the organization will cease publishing its weekly New York Dealer Osmium Price (MMACX00) due to a lack of spot market liquidity and
industry participation. The final publication of this price will be on March 26, 2015.
See the original announcement.
Market
Analysis
35
In Depth
November 2014
Editorial
Power
Chinese domestic production has also declined due to government regulations, which have
limited export licenses, export quotas, mining, and exploration.
Summary
On December 31, 2014, Platts will discontinue publishing its weekly FOB China
ferrotungsten price assessment (MMAHL00) and the weekly FOB China tungsten APT price
assessment (MMAHF00). As Platts has reported, spot export activity for ferrotungsten has
significantly fallen due to an export duty of 20%, and APT trade has been impacted, since APT
is the main raw material for ferrotungsten production and is also subject to an export tax.
Petroleum
Nat Gas
Coal
On November 6, 2014, Platts removed fixed pages PMA1316, 1317, and 470 from its
Platts Metals Alert service.
The page numbers were allocated for the Asian rebar commentary and quarterly Asian steel
trade data commentary. Both commentaries are published as news on pages PMA200-204
and in the Platts SBB Daily Briefing.
See the original announcement.
Other
Hong Kong Exchanges and Clearing Limited (HKEx), HKEx Group companies the London Metal
Exchange (LME) and LME Clear Limited, China Merchants Group Limited (CMG), and China
Merchants Securities Co. Limited (CMS), signed an MOU on November 22, 2014 for a
strategic alliance in product development and related services for market users.
Finance
November 2014
36
In Depth
Market
Analysis
On January 9, 2015, Platts will increase the frequency of its monthly US Midwestern wire rod
price assessment. Currently, the wire rod mesh quality N Amer dom prod ex-mill US MW mthly,
symbol SB01249, is published on the first business day of each month. Platts will increase
the frequency of this assessment to weekly on Fridays in order to capture changes in the
market throughout the month. This price assessment is only published on the SBB website
and price analyzer. All other specifications will remain the same.
Data
Vendors
Power
Petroleum
Editorial
The new USD/CLP futures contract calls for cash settlement and is quoted using OTC pricing
conventions of Chilean pesos per US dollar. It features a notional contract size of
100,000 US dollars and is offered monthly and quarterly, going out two years. The minimum
tick size is 0.01 Chilean pesos per one US dollar (1,000 CLP) for outright and calendar
spread transactions.
Summary
Effective November 24, 2014, the Chicago Mercantile Exchange (CME) launched a new
US Dollar/Chilean Peso (USD/CLP) futures contract for trading on CME Globex and for
submission for clearing through CME ClearPort, starting with the January 2015 contract month.
Finance
ZEMAs sophisticated market data management tools collect information from more than 4,000 data reports,
including reports from CME. To learn how you can begin building your own warehouse of environmental data, book a
complimentary ZEMA demonstration.
Nat Gas
Softs and
Metals
Potential users of VXTYN futures could include mortgage-backed securities investors and other
large credit managers seeking to hedge against adverse interest rate movements; large bond
funds that are naturally long interest rate volatility and are seeking a yield-enhancing
mechanism; and hedge funds, volatility arbitrage firms and global macro participants seeking
to express their views on forthcoming monetary policy events or to capture mispricing
anomalies between cross-asset volatility (e.g. fixed income versus equity volatility).
Coal
Futures on the VXTYN Index offer customers a way to hedge pure interest rate volatility risk
based on US government debt with a single product for the first time. The VXTYN Index, on
which futures on VXTYN are based, is calculated by applying the CBOE Volatility Index
(VIX Index) methodology to futures options data from CME Groups 10-year US Treasury note
contract--one of CME Groups most actively traded interest rate options products.
Other
37
In Depth
November 2014
Market
Analysis
This first-to-market index generates smart-beta indexes using the breadth of the data it
manages. Such next generation indexes are designed to add and remove stocks based on a
Data
Vendors
Effective November 22, 2014, Thompson Reuters launched a new StarMine Quality Earners
APAC ex-Japan Income Index, which offers lower volatility to help investors of exchange traded
funds (ETFs) manage portfolio risk. StarMines proprietary earnings quality model identifies
those companies with the most reliable and persistent earnings over time, giving the index an
edge over other similar indexes.
Editorial
Power
Petroleum
Summary
The new index can be licensed to issuers of ETFs and other investment products. It offers the
benefit of quantitative stock selection models within an independent index, to give investors
exposure to current and forecasted steady, profitable income-generating stocks. The index
uses a factor based on a companys dividend yield and StarMine Earnings Quality Score to
determine top earners. The final 50 candidates are given an equal weighting in the index, and
currently have an average market cap of $7.7 billion. This results in approximately 30%
higher returns and 30% lower volatility than a typical market capitalization weighted index for
the same region, over the last ten years.
Finance
rules-driven investment strategy, where Thompson Reuters can administer and calculate a
variety of smart-beta indexes.
ZEMA collects almost 100 reports from Thomson Reuters on a daily basis. To learn more,
visit http://www.ze.com/the-zema-solutions/data-coverage/.
Nat Gas
Softs and
Metals
The List tool allows clients to offset cleared risk, which reduces the number of existing trades
and overall capital costs. Asset manager NISA Investment Advisors, LLC (NISA), supported
by futures commission merchant Morgan Stanley, executed the first package trade using
Bloombergs List tool. Four leading financial institutions BofA Merrill Lynch, Citigroup,
J.P. Morgan and Wells Fargo responded with a price. Since then, more than $1 billion in
transactions have been completed on Bloomberg SEF using the List tool.
Coal
Effective November 30, 2014, Bloomberg SEF LLC launched a List trading tool for
interest rate swaps (IRSs). The new tool allows market participants to improve operational
efficiency by creating and sending a collection of swaps that can be traded at a single price
using Bloomberg SEFs request for quote (RFQ) functionality.
Other
38
In Depth
November 2014
Market
Analysis
Following the acquisition of the Singapore Mercantile Exchange and Singapore Mercantile
Exchange Clearing Corporation in November 2013, ICE retained both licenses to operate as
an approved exchange and an approved clearing house respectively. The listed and cleared
products at ICE Futures Singapore and ICE Clear Singapore will be announced, subject to final
regulatory approval from the Monetary Authority of Singapore (MAS). In addition, leveraging
ICEs proven repository technology and to further support regional market participants, ICE
Trade Vault, LLC has submitted a foreign trade repository application to the financial regulator
of Singapore.
Data
Vendors
On March 17, 2015, operations will commence at Intercontinental Exchange (ICE) Futures
Singapore and ICE Clear Singapore.
Petroleum
On November 17, 2014, ICE completed the transition of the Liffe European interest rate derivatives complex to ICE Futures Europe. Following the migration, European interest rate futures
and options are now listed on the widely
distributed ICE trading platform, which also lists US interest rate futures, including Eurodollar
and GCF Repo futures. These were previously listed on Liffe US and were migrated to the ICE
trading and clearing platforms in June 2014.
Power
Editorial
Summary
Finance
Through this base of operations in Asia, ICE will offer further global and regional products for
hedging and trading. In addition, the Singapore launch will expand ICEs network of
exchanges and clearing houses that serve the trading, data and risk management
requirements of global market participants.
The transition of the Liffe interest rate products to ICE was completed between November 6
and November 3, 2014, with the following contracts successfully migrated in three tranches:
Nat Gas
Coal
Other
Data
Vendors
Market
Analysis
The Liffe equity derivative product suite includes futures and options contracts on the FTSE
100 Index and futures contracts on the MSCI World and MSCI Europe Indexes, as well as a
39
In Depth
November 2014
Nat Gas
The ZEMA graph below shows the Bank of Canadas daily conversion rates of EUR to USD from
November 23, 2009 to November 21, 2014. Ranging from a high of 1.5 USD per EUR to a low
of 1.19 USD per EUR, volatility was greatest between November 2009 and June 2010. Data
was collected from a Foreign Exchange report.
Petroleum
The clearing transition of the Liffe market to ICE Clear Europe was completed in July 2013. All
Liffe commodity, interest rate, and equity derivatives contracts will continue to be cleared at
ICE Clear Europe.
Power
Improved pre-trade risk management technology, interval price limit circuit breakers and
sophisticated messaging policies to maintain highly efficient, orderly and reliable markets.
Editorial
Retention of a pro-rata, allocation-based matching model for interest rate futures markets.
Summary
Finance
comprehensive range of single stock futures, dividend adjusted stock futures, and individual
equity options.
Coal
ICE Clear Credit Starts Sovereign CDS Clearing for Hungary and
South Africa
On November 28, 2014, ICE announced that ICE Clear Credit has introduced clearing for
Hungary and South Africa credit default swap (CDS) instruments for dealer to dealer and
client clearing.
40
In Depth
November 2014
Market
Analysis
ICE Clear Credit was the first to clear Hungary and South Africa sovereign CDS, which are
constituents of the Markit CDX Emerging Markets Index Series, also cleared by ICE.
Turkey
Mexico
Venezuela
Editorial
Hungary
Summary
Finance
Russia
Power
Italy
Spain
Petroleum
Ireland
Nat Gas
ZEMA combines strengths in equities market data collection, visualization, and analysis, equipping traders and analysts
to make informed business decisions. To learn more, book a complimentary ZEMA demonstration.
41
In Depth
November 2014
Market
Analysis
Data
Vendors
The Concerto African Bond Indexes and respective bond data are disseminated via Deutsche
Brses direct data feed CEF Core. Historical data can be downloaded from the Deutsche
Brse Historical Data WebShop.
Other
The index data being provided includes the index levels in the various currencies and their
respective returns, as well as underlying bond data, including price data (bid/ask), yields,
and bond reference data, such as issuer, coupon, country, and currency. The bond prices are
derived from publicly available sources, from data provided by Concertos contributors, and
modelled prices. Pricing data is published daily.
Softs and
Metals
The Concerto African Bond Indexes were launched in November 2013 and measure the
performance of government bonds from the following 12 countries: Botswana, Egypt, Ghana,
Kenya, Mauritius, Morocco, Namibia, Nigeria, South Africa, Tunisia, Uganda, and Zambia. The
index family comprises pan-African indexes, regional indexes, and country indexes, as well as
relevant maturity sub-indexes. All indexes are market capitalization-weighted. The indexes are
calculated daily in their respective local currency as well as in USD, EUR, and ZAR. Daily index
history is available back to January 1, 2010.
Coal
On November 24, 2014, Deutsche Brse began disseminating fixed income indexes and
bond pricing data from African countries. The Concerto African Bond Indexes are the first
independent index family to measure pan-African local currency sovereign bond performance.
The indexes are calculated and maintained by Germany-based Concerto Financial Solutions.
Editorial
Power
On November 17, 2014, Deutsche Brse added eight exchange traded commodities (ETCs)
and four exchange traded notes (ETNs) from issuer Boost ETP Plc to Xetra.
Summary
Finance
Petroleum
The ETCs relate to indexes in the Nasdaq Commodity Index Family and enable investors to
participate in the rising or falling performance of one month futures contracts on individual
commodities with a leverage factor of three. The individual commodities are gold, silver, oil,
and natural gas.
Nat Gas
The Boost Nasdaq 100 3x Leverage Daily ETP reflects three times the daily percentage price
change of the 100 largest Nasdaq companies. Alternatively, investors can participate in the
negative performance of those companies using the Boost Nasdaq 100 3 x Short Daily ETP.
Coal
The Boost US Large Cap 3x Leverage Daily ETP tracks the performance of the Russell
1000 Net 30% TR USD Index with triple leverage. The Russell 1000 Index includes the
1,000 largest US stock corporations as measured by market capitalization. The negative
performance of those securities can be tracked using the Boost US Large Cap 3x Short Daily ETP.
New products are listed in the following table:
DE000A1ZLCQ2
0.99%
DE000A1ZLCP4
0.99%
DE000A1ZK3W9
0.99%
DE000A1ZK3V1
0.99%
DE000A133ZT6
0.99%
DE000A133ZV2
0.99%
DE000A133ZU4
0.99%
DE000A133ZW0
0.99%
DE000A133ZY6
0.75%
DE000A133ZR0
0.80%
DE000A133ZS8
0.75%
DE000A133ZX8
0.80%
Market
Analysis
Data
Vendors
Management Fee
Other
ISIN
Softs and
Metals
Boost ETPs
November 2014
42
In Depth
SPDR BofA Merrill Lynch 0-5 Year EM USD Government Bond UCITS ETF
Asset Class
Government bonds
ISIN
IE00BP46NG52
0.42%
Distribution Policy
Distributing
Benchmark
BofA Merrill Lynch 0-5 Year EM USD Government Bond ex-144a Index
Power
ETF Name
Petroleum
Softs and
Metals
Manage equities data with ease using ZEMAs data collection, validation, analytic, and visualization functionalities. To
learn more, book a complimentary ZEMA demonstration.
Coal
Nat Gas
The SPDR BofA Merrill Lynch 0-5 Year EM USD Government Bond UCITS ETF enables investors
to participate in the performance of USD-denominated government bonds with short
maturities from emerging market countries. Bonds must have a minimum nominal value of
US$500 million, a residual maturity of no more than five years, and fixed income in order
to be accepted into the index. Bonds with a rating of Caa3/CCC- or lower are excluded. The
country risk is limited to a maximum of 10% per country.
On November 13, 2014, Nasdaq announced that FlexShares ETFs, sponsored and managed
by Northern Trust, listed a new ETF, FlexShares Credit-Scored US Corporate Bond Index Fund
(symbol: SKOR), on The Nasdaq Stock Market. SKOR began trading on November 13, 2014.
In Depth
43
Market
Analysis
Data
Vendors
In addition to the admission as trading and clearing participant, Deutsche Brse and Bank of
China continue their strategic cooperation in the asset servicing, securities safekeeping, and
Renminbi businesses.
Other
On November 14, 2014, The Bank of China received authorization via its Frankfurt branch
office as a trading and clearing participant on the Deutsche Brse Group cash market. This
will provide Chinese issuers and Asian investors with direct access to the German and
European capital markets. The Bank of China Frankfurt Branch is the first Chinese clearing
participant at Deutsche Brse based in the euro area.
November 2014
Editorial
On November 14, 2014, Deutsche Brse listed a new bond index fund from the ETF
offering issued by State Street Global Advisors (SPDR) in the XTF segment of Xetra.
Summary
Finance
Summary
Editorial
Finance
SKOR is a fixed income portfolio consisting of corporate debt securities selected using a
proprietary credit scoring process. The fund focuses on an intermediate maturity, with
securities ranging from two to 10 years in maturity. SKOR is an accessible and efficient
investment product which provides exposure to US corporate debt. The fund seeks to
maximize the credit score while maintaining a similar spread and duration to the intermediate
maturity corporate debt universe.
See the original announcement.
Power
ZEMA collects over 50 NASDAQ OMX records, including financial market records. For further information,
visit http://www.ze.com/the-zema-solutions/.
On November 11, 2014, Nasdaq and the Iraq Stock Exchange (ISX) successfully launched the
X-stream Trading technology, which replaced the existing Horizon platform.
Nat Gas
The X-stream Trading upgrade provides ISX with a widely deployed high-end, multi-asset
trading platform that complies with international standards. The new technology provides
ISX with improved performance and up to ten-fold the amount of the capacity.
Petroleum
Coal
Softs and
Metals
On November 10, 2014 Nasdaq launched the Global Buyback Achievers Index to serve
as the basis for Invesco PowerShares most recent ETF launch the PowerShares Global
Buyback Achievers UCITS ETF (symbol: BUYB). This is part of Nasdaqs cooperation with
Invesco PowerShares to expand the smart beta-buyback lineup.
This is the first product based on the successful Nasdaq Buyback Achiever Index family to
launch in the UK and Europe.
See the original announcement.
Other
ZEMA, ZEs enterprise data management solution, contains advanced display functionalities which enable users to easily
align news updates alongside data, which gives users an enhanced market perspective. For further information,
visit http://www.ze.com/the-zema-suite/dashboard/.
44
In Depth
November 2014
Market
Analysis
Data
Vendors
On November 5, 2014, Nasdaq announced that Global Access Services will launch a
Nasdaq Point of Presence in Chicago, IL in the first quarter of 2015. The Nasdaq POP in
Chicago, along with the Nasdaq POP already live in Secaucus, NJ, will be available for market
participants seeking access to Nasdaq eSpeed, the exchange groups over-the-counter
platform for electronic trading in US Treasury securities, and Nasdaqs US cash equities and
equity derivatives markets pending Securities and Exchange Commission approval. In
addition, Nasdaq will establish a disaster recovery facility in Chicago for Nasdaq eSpeed in
the fourth quarter of 2014.
Power
Petroleum
Nat Gas
Coal
Softs and
Metals
Editorial
LMBS seeks to generate current income with a secondary objective of capital appreciation.
Under normal market conditions, the fund will seek to achieve its investment objectives by
investing at least 80% of its net assets (including investment borrowings) in investment-grade,
mortgage-related debt securities and other mortgage-related instruments tied to residential and
commercial mortgages. The fund offers an attractive level of current income with an effective
duration target of three years or less, limited interest rate sensitivity due to a focus on managing
and limiting the average portfolio duration, opportunity to exploit inefficiencies in mortgagerelated securities and the potential for capital appreciation over time.
Summary
Effective November 5, 2014, Nasdaq listed two new ETFs: the First Trust Emerging Markets
Local Currency Bond ETF (symbol: FEMB) and the First Trust Low Duration Mortgage
Opportunities ETF (symbol: LMBS), on The Nasdaq Stock Market. FEMB is an actively managed
ETF that seeks maximum total return and current income, while minimizing volatility by actively
managing currency exposure. The fund invests in bonds that are denominated in the issuers
local currency as opposed to US dollars. Emerging market economies make up more than half of
the worlds gross domestic product based on purchasing power parity and many are expanding
and issuing debt with attractive yields to help finance their growth infrastructures and
businesses. Because emerging markets are generally not as stable as developed markets, their
bonds typically offer higher yields compared to developed market bonds to compensate for
higher risk.
Finance
Nasdaq Lists First Trust Emerging Markets Local Currency Bond ETF
and First Trust Low Duration Mortgage Opportunities ETF
ZEMA collects over 300 financial market records. To learn more about ZEMAs vast data coverage, visit
http://www.ze.com/the-zema-solutions/data-coverage/.
Other
Effective November 5, 2014, Nasdaq listed a new ETF, the First Trust International IPO ETF
(symbol: FPXI) on The Nasdaq Stock Market. FPXI seeks investment results that correspond to
the price and yield (before the funds fees and expenses) of an equity index called the IPOX
International Index. The IPOX International Index measures the performance of the 50 largest
and typically most liquid companies that are domiciled outside the US within the IPOX Global
Composite Index (the base index).
45
In Depth
November 2014
Market
Analysis
Data
Vendors
The base index is constructed and managed to provide a broad and objective view of global
aftermarket performance of recent IPOs and spin-offs in both emerging and developed
countries. After applying initial screens for diversification, capping and liquidity, all eligible
constituents generally enter the base index on the close of the sixth trading day. The 50 largest
stocks from this universe are selected for the IPOX International Index and added upon quarterly
rebalance. The unique characteristics of IPOs and spin-offs tend to fade over the course of about
four years, so constituent stocks are removed from the index after no more than 1,000 trading
days (approximately four years).
Summary
Editorial
Power
Effective November 11, 2014, the International Securities Exchange (ISE) ETF Ventures
released the ISE Cyber Security Index, which allows investors to take advantage of both
event-driven news and long term economic trends in the cyber security and information
technology space. The index is the first and only one focused specifically on publically-listed
companies that develop or provide cyber security technology and related services. The index
includes 30 constituent companies, including VASCO Data Security International Inc., Palo
Alto Networks Inc., Symantc Corp., Juniper Networks Inc., FireEye Inc., and Splunk Inc.
Finance
The index is licensed by PureFunds and will be the basis for an ETF.
Petroleum
Eurex Exchange announced on November 29, 2014 that it has recently collaborated
with DRW Investments in launching variance futures contracts. DRW quotes the contract up to
50,000 notional vega at a spread of 1.5 volatility points.
ZEMA presently collects many Eurex reports, including Eurex futures data reports such as the Eurex-Futures report. To
learn more, book a complimentary ZEMA demonstration at http://www.ze.com/book-a-demo/.
Softs and
Metals
Coal
Several clearing members have completed their internal setup and are able to offer their
clearing services for this new product - among them Societe General Newedge UK Limited,
Jeffries Bache Limited, and Credit Suisse. Further, Eurex also offers the Advanced Services
toolkit for its variance futures as of the week of November 29, 2014.
Nat Gas
46
In Depth
November 2014
Market
Analysis
Like Barchart OnDemand, ZEMA collects a wide range of equity market data from a range of exchanges. ZEMA also
collects over 60 reports from Barchart.com, many of which are related to equity options. To learn more, book a
complimentary ZEMA demonstration at http://www.ze.com/book-a-demo/.
Data
Vendors
Other
Effective November 23, 2014, Barchart.com began offering US and Canadian equity
options price data through Barchart OnDemand. Barchart OnDemand is a cloud-based
service developed for accessing and delivering market data and information using web
services APIs. With the availability of equity options, clients can request current, end-of-day,
and historical options pricing using a simple Barchart OnDemand API. The getEquityOptions
API offers access to price data, Geek calculations like delta, gamma, theta, and vega, and
implied volatility data.
Summary
Editorial
Finance
Power
On November 17, 2014, ASX and the Bank of China signed a heads of agreement to
expand their strategic cooperation to develop the Renminbi (RMB) as a currency in Australias
financial markets.
Petroleum
The heads of agreement complements the recent appointment of the Bank of China as the
official RMB clearing bank in Australia by the Peoples Bank of China, Chinas central bank.
Official RMB clearing banks have direct access to Chinas onshore RMB and foreign exchange
markets, and enhance liquidity in the local market.
Nat Gas
Coal
Other
Data
Vendors
Market
Analysis
47
Depth
InInDepth
November 2014
Summary
Other
Editorial
Power
Coal
Future releases of Lantern Live will likely include the ability to crowdsource information on the
status of gas stations via standardized hashtags for social media. Lantern Lives code will also
be open source, allowing individuals to reuse the code in their own applications.
Nat Gas
Lantern Live allows users to report the operational status of local gas stations, find fuel, and
look up power outage maps from local utilities, while also accessing tips and guidelines. Lantern Live builds on the White House Office of Science and Technology Policys Disaster Response and Recovery Initiative, which is designed to accelerate the development of open data
for power outages.
Petroleum
On November 17, 2014, the US Department of Energy launched a free mobile application
called Lantern Live that helps individuals quickly find and share information about nearby gas
stations and power outages during energy
emergencies. Lantern Live is available for Android devices through Google Play.
Softs and
Metals
Finance
Data
Vendors
Bank of China and DME will examine the possibility of creating new financial products
and financing solutions to support clients in Middle Eastern and Asian markets. The two
institutions will also promote the development of close links between the financial and trading
communities in Dubai and China.
Market
Analysis
48
In Depth
November 2014
Editorial
Power
Petroleum
Nat Gas
Since the last issue of ZE DataWatch, ZE has added data reports published by EIA, Credit
Suisse reports, LCH.Clearnet Reports, and USDA among others. The 27 EIA reports cover a
wide range of petroleum market data reports from import and export data to refineries
operations. This set of new parsers has been developed in response to a growing need for
petroleum supply information. LCH.Clearnet reports were added in response to investors and
traders need for more forward freight assessment data. The USDA reports consist of updated
grain transportation tariff rates.
Summary
For 20 years, ZE PowerGroup Inc. (ZE) has consistently kept up to date on the latest in energy
and commodity data changes. ZE collects data from vendors spanning the weather, oil,
natural gas, electricity, agriculture, and finance industries, including Platts, Argus, the
Chicago Mercantile Exchange, the New York Mercantile Exchange, the Intercontinental
Exchange, and OPEC. ZE then provides its clients with access to both public (free subscription)
and private data reports, including reports that are collected based on clients specific needs.
Coal
Softs and
Metals
https://www.credit-suisse.com/global/en.html
www.lchclearnet.com/
Finance
http://www.ams.usda.gov/AMSv1.0/ams.fetchTemplateData.do?template=
TemplateA&navID=AgriculturalTransportation&leftNav=Agricultural
Transportation&page=ATGTRDatasets&description=GTR%20Datasets
To see the full list of ZEMA data providers, visit http://www.ze.com/the-zema-solutions/
data-coverage/.
Other
ZEs white paper analyzes the hidden inefficiencies and risks associated with large-scale
project implementations of mission-critical EDM solutions, which form the integration layer
49
In Depth
November 2014
Market
Analysis
ZE has released a white paper, entitled Weighing the Options: Build an Internal EDM System
or Get ZEMA, which examines the return on investment and risk-reward relation between
building an enterprise data management (EDM) system in house, from scratch or acquiring
an off-the-shelf, third-party product from a specialized vendor like ZE. ZE is the developer of
ZEMA, a best-in-class, full-featured EDM solution for energy and commodities markets.
WHITE PAPER
November 2014
Power
Editorial
Summary
Petroleum
Nat Gas
Coal
Softs and
Metals
November 21, 2014: MDA Weather Services offers a variety of data and reports used
throughout the energy, agriculture, and weather markets. In addition to providing the basic
data products (historical and forecast temperatures,precipitation, etc.) used by traders in
these industries worldwide, MDA goes beyond the numbers to provide unique datasets
tailored for traders in each industry. New product offerings include:
Real-Time Weather Model Data
Finance
Other
While many users can receive weather information after the weather model runs, there is great
utility in getting the raw numerical data immediately as it is issued. In recent months, there
has been a spike in interest in receiving weather model forecast data as soon as possible to
assist algorithmic trading and simply getting a sense of how much warmer or colder, wetter or
drier the incoming model data is before the rest of the mark. Time is money. Getting the
information as soon as possible can give the user a critical advantage especially with the
abnormally cold trends seen during the early part of the heating season in North America.
This capability is available for all model runs including the 12z GFS that falls during the
middle of the US trading day and can have large impacts on the market. It is also available for
the European Center for Medium-Range Weather Forecasts (ECMWF) weather model, widely
regarded as the best global model in the world.
Market
Analysis
Temperature is not the only value that can be produced with this real-time capability
precipitation, wind, and more are also available.
50
In Depth
November 2014
Power
Petroleum
In order to encourage transparency in the pricing of these fuels, ENMC is publishing daily,
weekly and monthly prices derived from Argus fuels and freight assessments, with
adjustments for local costs and conditions.
Editorial
London, November 18, 2014: Portuguese fuel markets authority ENMC (Entidade Nacional
para o Mercado dos Combustveis) has launched a series of national reference prices for
gasoline, diesel and LPG based on Argus assessments.
Summary
Nat Gas
The prices were launched on 14 November and can be seen on the bodys website
www.enmc.pt. They are intended as a reference for Portuguese consumers and government,
and to encourage the formation of final retail prices that are responsive to changes in
international markets. They reflect the post-tax price of fuels sold from storage in Lisbon and
do not include distribution costs or retail margins.
Coal
We are very pleased with the service from Argus, which will help us build a system to bring
more transparency to the Portuguese market for gasoline, diesel and LPG, ENMC president
Paulo Carmona said.
Finance
Media contacts:
Houston
Gabriela Alcocer, +1 713 429 6308
gabriela.alcocer@argusmedia.com
Softs and
Metals
We are delighted that ENMC has chosen to base its reference prices on Argus, in recognition
of our clear methodology and benchmark status in European wholesale markets,
Argus Media chairman and chief executive Adrian Binks said.
Other
Market
Analysis
51
In Depth
November 2014
Petroleum
Nat Gas
Coal
Softs and
Metals
Finance
Other
The already existing 15-minute prices that emerge on the continuous Intraday market
remunerate more accurately flexible capacity able to respond to 15-minute variations in
production and consumption. The auction further fosters this idea by concentrating liquidity
and creating the most robust possible price reference. The value of flexibility is one of the key
issues power markets need to tackle. This new auction is the right tool to determine a clear cut
price signal on 15-minute basis in Germany and to reveal the value of flexibility, says
Jean-Franois Conil-Lacoste, Chairman of the Management Board of EPEX SPOT.
Power
15-minute contracts help fine-tuning portfolios after the Day-Ahead auction for hourly
contracts at noon and facilitate trading for intra-hour variations in production and
consumption. The 15-minute auction will be incorporated in the Intraday market segment, as
it is held after the day-ahead nomination deadline at 2:30 p.m. in Germany. It will prove to be
a valuable tool for market participants as it will help them fulfilling their balance requirements
towards German transmission system operators already on the calendar day before delivery.
Editorial
The new 15-minute call auction on the German Intraday market is designed to cope better
with the emerging flexibility challenges of power markets. It will take place daily at 3 p.m.,
before the opening of the continuous Intraday market for 15-minute contracts at 4 p.m., and
it will cover the 96 15-minute contracts for the next calendar day from midnight on. The
auction will run on the well-known ETS used for EPEX SPOTs Day-Ahead markets. The
calculation of prices and volumes will be performed using Euphemia, a tool co-developed by
EPEX SPOT in the framework of the Price Coupling of Regions initiative. More specifications on
the 15-minute auction can be found in the factsheet on the 15-minute Intraday call auction.
Summary
Paris, Leipzig, November 13, 2014: The 15-minute call auction on the German Intraday
market is scheduled to launch on December 9, 2014 (trading day). Member tests have been
conducted successfully. 60 Exchange Members have shown interest in the new segment
so far.
52
In Depth
November 2014
Market
Analysis
The European Power Exchange EPEX SPOT SE operates the power spot markets for Germany,
France, Austria and Switzerland (Day-Ahead and Intraday). Together these countries account
for more than one third of the European power consumption. EPEX SPOT also acts as market
operating service provider for the Hungarian Power Exchange HUPX and operates the coupling
between the Czech, the Slovak, the Hungarian and soon the Romanian markets on behalf
of the local Exchanges. It is a European company (Societas Europaea) based in Paris with
branches in Leipzig, Bern and Vienna. Over 220 companies from Europe are active on EPEX
SPOT. 312 TWh were traded on EPEX SPOTs power markets in the first ten months of 2014.
Softs and
Metals
Finance
Other
Data
Vendors
In Depth
53
Coal
November 2014
Nat Gas
1 Crude Oil Futures Decline Before Tomorrows OPEC Meeting, Bloomberg, November 26, 2014, accessed
November 26, 2014, http://www.bloomberg.com/news/2014-11-26/crude-falls-near-4-year-lows-amid mixed-signals-from-opec.html
Petroleum
Global crude benchmarks roughly followed the same story of the past few months: ample
supply and tepid demand. In November 2014, worries over weakening global demand
combined with signals that OPEC producers will not cut output weighed on prices in the final
days of the month. Interestingly, Saudi Oil Minister Ali Al-Naimi said oil prices will stabilize on
their own, signaling that no action will be taken to curb the output.1 It is safe to say that crude
has entered a bear market amid the record high US output and signs of slow demand.
According to EIA, US crude stockpiles rose 1.95 million barrels to 383 million in the third
week of November, surpassing the market expectation of a 250,000 barrel supply increase.1
Also, US crude output rose 73,000 barrels a day to 9.08 million in the third week of
November, the highest in weekly records since 1983.1 The oil market is clearly oversupplied.
Power
On the New York Mercantile Exchange (NYMEX), prompt-month contracts for Brent and
Western Texas Intermediate (WTI) crude oil continued to dive for the fifth month in a row to the
lowest levels of the past 12 months. By end of day November 26, 2014, the prices of Brent
and WTI had both dropped by 8% from the previous month. Throughout November 2014,
prompt-month contracts for Brent dipped just below $85 USD/Bbl to settle at $81 USD/Bbl.
Meanwhile, the prompt-month contract prices for WTI plunged by $7 USD/Bbl to $77 USD/
Bbl. In November 2014, data from NYMEX future settlements showed that Brent and WTI oil
prices traded near four-year lowsBrent and WTI traded at $23 USD/Bbl and $19 USD/Bbl
below the last 12-month average. Furthermore, the last 12-month averages for Brent and WTI
on NYMEX dropped to $104 USD/Bbl and $96 USD/Bbl, respectively. The Brent-WTI spread
(represented by the purple area in the graph above) stayed at $4 USD/Bbl this month, which
was $4 USD/Bbl below the last 12-month average of $8 USD/Bbl.
Editorial
Summary
Summary
Editorial
Power
Petroleum
Nat Gas
On NYMEX, forward curves for Brent and WTI prices fell in the first three weeks of November
2014 for the next 24 months when compared to the same period in October 2014. The
average NYMEX Brent forward prices for delivery until November 2016 (represented by the
blue line in the graph above) dropped by $6 USD/Bbl to $88 USD/Bbl, while WTI (the red
line) fell by $5 USD/Bbl to an average of $77 USD/Bbl for the same delivery period. The
Brent-WTI spread also dropped by 11% to $8 USD/Bbl (the purple area) on average for the
next 24 months.
Coal
Softs and
Metals
Finance
There is a shift happening in the crude market as prices continue to dive. Demand for imports in
the United States has significantly reduced as the country is moving toward energy
independence thanks to the shale boom. Meanwhile, demand would not receive any boost
from this. It looks like this phenomenon has adversely affected Brent prices since there is less
desire to import crude to the United States. As of November 27, 2014, OPEC did not take any
action to ease a huge global oversupply. As a result, Brent slid as much as 7% for delivery in
the next 24 months on expectations that a oil supply glut will build up in the coming months
and will continue diving to find equilibrium between supply and demand.
Other
Data
Vendors
54
In Depth
November 2014
Petroleum
Nat Gas
Coal
Softs and
Metals
When considering the Henry Hub natural gas movements in the past few months, it is evident
that the market momentum was a transition from bearish sentiment to bullish sentiment.
Consequently, this translated into an increase in price, at least for the next four months.
Power
On the ICE, natural gas futures available for trade in the next 12 months at Henry Hub
bounced back due to increased demand in November 2014 (until the end of the third week
of the month) when compared to the previous month. The average price of Henry Hub natural
gas contracts in the first three weeks of November 2014 for delivery in the next 12 months
(represented above by the orange line) went up by 3% to average at $3.96 USD/MMbtu when
compared to the same contracts period in October 2014 (represented by the blue line). Data
from ICE suggests the spread between November 2014-October 2015 contracts
(represented by the red bar) averaged at $0.10 USD/MMbtu for the next 12 months. The price
jump in the next four months comes from increased demand, causing the spread to average
at $0.30 USD/MMbtu.
Editorial
Summary
Finance
Other
Data
Vendors
55
In Depth
November 2014
Petroleum
Nat Gas
Coal
Softs and
Metals
Finance
For the week ending November 19, 2014, EIAs Natural Gas Weekly Update reported that cold
November temperatures boosted natural gas prices.2 In the third week of November 2014, dry gas
production fell by 1.5% compared to the previous week, while total demand during the week
increased by more than 35% for the same period. Additionally, the third week of November marked
the first net withdrawal of the 2014-15 heating season. According to EIA, the East and West regions
(two of the three regions) had net withdrawals of 11 Bcf (2 Bcf larger than its five-year average) and
7 Bcf (6 Bcf larger than its five-year average). Also, temperatures in the Lower 48 states averaged
8 Celsius, slightly below the 30-year average.
Power
On the Intercontinental Exchange (ICE), natural gas prices went up in all the observed North
American hubs by the end of October 19, 2014, which is a common seasonal trend. When
compared to the first 19 days of October 2014, the prices increased by 98% in New Yorks Transco
Zone-6 to $4.08 USD/MMBtu, by 12% in Chicago to $4.26 USD/MMBtu, by 6% in Henry Hub to
$4.00 USD/MMBtu, and by 5% in Californias PG&E Citygate to $4.48 USD/MMBtu. Comparing
November 2014 prices to last years prices, monthly average gas prices increased in New Yorks Z6,
Chicago Citygates, Henry Hub, and PG&E by 7%, 14%, 10%, and 16%, respectively. In the first three
weeks of November 2014, Trans Z6 was the most volatile hub with prices ranging from $2.65 USD/
MMBtu on November 2 to $9.35 USD/MMBtu on November 18. The largest spike happened in New
York City on November 18th and 19th where the temperature dropped to -4C and -5C, respectively.
Editorial
Summary
Other
November 2014
56
In Depth
2 Natural Gas Weekly UpdateWeek Ending November 19, 2014, U.S. Energy Information Administration, November 25, 2014,
accessed November 25, 2014, http://www.eia.gov/naturalgas/weekly.
Editorial
Power
Summary
Petroleum
Nat Gas
From October 2014 to November 21, 2014, the monthly temperature continued to fall in all
observed North American cities due to seasonality. Data from AccuWeather shows
San Antonio, Chicago, New York, and San Diego felt colder by 13, 12, 8, and 3 degrees
Celsius (C), respectively, when compared to the previous month. In November 2014, the
average monthly temperatures in the observed North American cities were as follows:
San Antonio (12C), Chicago (-4C), New York (6C), and San Diego (19C).
Coal
Softs and
Metals
In November 2014, the two-year average in Chicago and San Antonio was lower, while New
York and San Diego felt warmer. When comparing the past two-year average of November
temperatures, this years November felt colder in Chicago and San Antonio by 5 and
1 degree(s), respectively. On the other hand, San Diego and New York were 2 and
1 degree(s) below the two-year average. Once more, Chicago experienced the largest weather
fluctuations among all the observed cities, as the temperature reached 10C on November 10
and dropped drastically to -20C on November 18.
Finance
Other
57
In Depth
November 2014
Data
Vendors
Editorial
Summary
Power
Petroleum
Coal
Softs and
Metals
Comparing day-ahead pricing of November 2013 with November 2014, CAISO SP-15, PJM,
and ERCOT, increased 13%, 20%, and 17%, respectively. Meanwhile, NYISO day-ahead
prices dropped by 16% in comparison to the previous year.
Nat Gas
On the ICE, electricity day-ahead prices were all over the place in observed North American
ISOs by the third week of November when compared to the previous month. From
October2014 to November 2014, electricity day-ahead prices decreased in CAISO SP-15
and ERCOT (Texas) by 1% to $49.33 and 5% to $ 35.94 USD/MWh, respectively. On the other
hand, PJM and NYISO day-ahead prices went up by 16% to $48.68 USD/MWh and by 1% to
$42.17 USD/MWh, respectively. Cold temperatures in the Northeast could be responsible for
boosting the demand and, consequently, pushing the prices higher compared to the rest of
the country.
Finance
Other
Data
Vendors
58
In Depth
November 2014
Summary
Editorial
InDepth
Power
Petroleum
Nat Gas
Coal
Softs and
Metals
Finance
In the past year alone, North America and Asia have developed
an especially close relationship with regards to LNG.
Various economic and political factors have spanned the Pacific
to tie these continents together in a dynamic energy exchange.
Other
November 2014
59
Market
Analysis
In the past year alone, North America and Asia have developed an especially close
relationship with regards to LNG. Various economic and political factors have spanned the
Pacific to tie these continents together in a dynamic energy exchange.
Data
Vendors
LNG is a quickly growing energy commodity. Historically, much of this growth has been
attributed to a combination of Middle Eastern and South American LNG exports to European
and Asian markets. Recently, North America has witnessed rapid growth in facility
construction with projects in Oregon, Texas, Washington, and British Columbia. While the
number of LNG projects is surging in order to meet demand, not all of these projects will
succeed nor lead to outcomes investors initially predicted.
Summary
Editorial
In 2003, the United States alone had 25 LNG export terminals, 91 import terminals, and 360 LNG
shipsaltogether handling approximately 220 million metric tons of LNG every year. According to
the Federal Energy Regulatory Commission (FERC), the United States currently has over 110 LNG
facilities operating within its borders with dozens of projects on the horizon. The EIA expects the
United States will be a net exporter of LNG by 2015.1
InDepth
As of November 15, 2014, the following US projects have been approved for construction:
Petroleum
Nat Gas
Coal
Power
Import Terminals
Gulf of Mexico:
1.0 Bcf/d (Main Pass McMoRan Exp.)
1.4 Bcf/d (TORP Technology-Bienville LNG)
Offshore, Florida
1.2 Bcf/d (Hoegh LNGPort Dolphin Energy)
Softs and
Metals
Finance
Other
Data
Vendors
Market
Analysis
1 Natural Gas, Energy Information Administration, November 12, 2014, accessed November 20, 2014,
http://www.eia.gov/forecasts/steo/report/natgas.cfm.
2 North American LNG Import /Export Terminals Approved, Federal Energy Regulatory Committee, August 15, 2014, accessed
September 16, 2014, http://www.ferc.gov/industries/gas/indus-act/lng/lng-approved.pdf.
November 2014
60
Summary
InDepth
Editorial
As of November 2014, there are six export facilities proposed in Canada: three in Kitimat, BC,
two in Prince Rupert, BC, and one in Guysborough County, NS. Furthermore, as of
September 2014, an additional 10 LNG export facilities have entered the regulatory review
process: eight to be constructed in British Columbia and two in Rivire-du-Loup, QC, and
Quebec City, QC, respectively.3
The following is a snapshot of major Canadian LNG facilities scheduled for construction:
Price
$1.7
Squamish, BC
2.0 billion
Unknown
Woodside
Petroleum Ltd.
Unknown Unknown
Market
Analysis
Late 2010s
21.6
mt/y
3 Lamers, Matthew, B.C.s 15 LNG Projects: Where They Stand Today, Pipeline News North, April 17, 2014, accessed
September 30, 2014, http://www.pipelinenewsnorth.ca/news/industry-news/b-c-s-15-lng-projects-where-they stand-today-1.1122622.
November 2014
Data
Vendors
Unknown
Land-based
facility, Ridley
$16 billion
Island, Prince
Rupert
South site of
Unknown Grassy Point,
Kitimat, BC
Unknown
Other
Prince
2017-2020 BG Group
Rupert LNG
Unknown
Land-based
facility, Bish
Cove, Kitimat
Finance
Nexen (CNOOC),
Aurora LNG 2014-2017 INPEX, JGC
Corporation
Floating facility,
Kitimat or Prince 2.3 mt/y
Rupert (both BC)
Land-based
facility, Grass
24 mt/y
Point, near Kitimat, BC
TransCanadas
Coastal
GasLink
Pipeline Ltd.
PNGs
Looping
Project
Nexen assets
in Horn River
and Cordova
basins
Chevron/
Apache
holdings in
Horn River,
Liard gas
basins
Pipeline
running from
Cypress to
Ridley Island.
Softs and
Metals
Unknown
Land-based faUnknown
cility: Kitimat, BC
Unknown
Coal
Triton LNG
AltaGas Ltd.,
2016-2021
Idemitsu Kosan
Floating and
land-based
5 mt/y
facilities, Stewart
Nat Gas
Joint venture
Shell Canada ltd.,
2015-2017
Unknown
Korea Gas
corporation
Source of
Natural Gas
Progress
Energys
19.6
holdings in
mt/y
North Montey
Existing
2.1 mt/y Fortis, BC gas
pipeline
Capacity
Petroleum
Land-based
facility on
$11 Billion
Lelu Island,
Prince Rupert
Stewart
Canada Stewart
2015-2019
Unknown
Energy LNG
Energy Group Ltd.
Chevron and
Kitimat LNG Late 2010s Apache have
50/50 equity
Location
Power
Start /Finish
Partners
Date
Petronas, Japex,
Pacific
Petroleum
North West 2014-2017
Brunei, Indian
LNG
Oil Corp
Woodfibre
LNG Export 2014-2017 Pacific Oil & Gas
Pte. Ltd.
Name
61
Start /Finish
Partners
Date
Price
Location
Capacity
Douglas
Channel
LNG
BC LNG Export
Cooperative,
2014-2016
Haisla Nation,
LNG Partners
$500
million
Floating facility,
Kitimat, BC
Unknown Unknown
InDepth
Source of
Natural Gas
Summary
Name
Editorial
Petroleum
One of the biggest changes to natural gas markets is that shale gas production has taken off
in recent years. As of 2012, North America leads the world in shale gas production (Figure 1).
But what is the future of shale gas, and how will it affect global LNG markets and projects?
Will increased ease of access to shale gas mean greater exports, greater domestic consumption for countries with large reserves, or both?
Power
Nat Gas
Shale gas
U.S.
39%
Coal
Canada
15%
China
0
10
20
30
40
50
60
Softs and
Metals
<1%
70
Finance
Source: U.S. Energy Information Administration, LCI Energy Insight, Canada National Energy Board,
and Facts Global Energy
Note: Canadian data uses marketable production, which is comparable to dry production.
NorthGas
America
Leads
the World
theperProduction
of Shale
Figure 1 - Shale
Production
(billion
cubic in
feet
day) [Source:
EIA] Gas
(billion cubic feet per day)
November 2014
62
Market
Analysis
Cockerham, Sean, More Efficient Fracking Means More Oil and Natural Gas, Star-telegram, October 6, 2014, accessed
October 8, 2014, http://www.star-telegram.com/2014/10/06/6179292/more-efficient-fracking-means.html?rh=1.
Barteau, Mark, and Sridhar Kota, Shale Gas: A Game-Changer For U.S. Manufacturing, The Energy Institute of the University
of Michigan, July 1, 2014, accessed October 15, 2014, http://energy.umich.edu/sites/default/files/PDF Shale Gas FINAL web version.pdf.
Data
Vendors
4
5
Other
While extracting natural gas from shale rock formations has been in practice since the 1800s,
recent scientific advances in drilling techniques have enabled drilling companies to operate
with greater efficiency, resulting in greater productivity. For example, the Eagle Ford shale rig
in south Texas pumps an average of 400 more barrels per day of natural gas than seven years
ago.4 In the United States, improved technology in shale gas extraction and processing has
been a primary factor in reducing US imports of natural gas from Canada. Indeed, the development of horizontal drilling and high-volume hydraulic fracturing has played a significant
role in allowing the United States to produce 95% of the gas it consumes domestically as of
2011.5 So how much of an effect have these developments had on US natural gas dynamics?
Summary
InDepth
Editorial
Let us take a look at US LNG exports (Figure 2), natural gas imports (Figure 3), and annual
natural gas consumption (Figure 4). As Figure 2 shows, we observe a steady decline in the
exports of US LNG from 2011 to 2014 and Figure 3 shows a steady decline in natural gas
imports as averaged across the whole of the United States from 2008 to 2013. Further, Figure 4
shows a steady increase in natural gas consumption in the United States between 2009-2013.
Power
Finance
Other
Data
Vendors
Market
Analysis
63
Summary
InDepth
Editorial
Power
Petroleum
Nat Gas
2012
Softs and
Metals
History
Coal
How does one explain a situation in which a country is importing and exporting less but consuming more? The answer is simple: the United States is consuming more of the gas it produces. As Figure 5 shows, shale gas rose from less than 1% of domestic gas production in
the United States in 2000 to more than 20% by 2014. The EIA predicts that shale gas will
account for 46% of the US gas supply by 2035.6
Projections
40
Finance
30
20
SHALE GAS
Other
TIGHT GAS
10
0
1990
2000
Data
Vendors
ALASKA
2010
2020
2030
2040
6 Barteau.
November 2014
64
Market
Analysis
Figure 5 - US natural gas production by source, 1990-2040 (trillion cubic feet) [Source: EIA]
Editorial
2012
Projections
8
6
Summary
History
InDepth
With the growth in domestic production, the United States is less likely to want to import
natural gas from Canada (Figure 6). In fact, Canada has already started to show a decline in
natural gas exports (Figure 7).
EXPORTS TO MEXICO
Power
EXPORTS TO CANADA
4
2
Petroleum
0
IMPORTS FROM CANADA
-2
Nat Gas
LNG IMPORTS
-4
-6
2000
2005
2010
2015
2020
2025
2030
2035
2040
Coal
Figure 6 - US
(trillion
cubic feet)
[Source:
USNatural
NaturalGas
GasImports
Importsand
andExports
Exports,
2000-2040
(trillion
cubicEIA]
feet)
Softs and
Metals
In other words, it appears there is a trend where the United States consumes more of the
gas it produces, and any surplus is sold to other markets. As a consequence, Canada is thus
forced to look for alternative markets to export to.
100
10
80
60
40
20
0
2006
2007
2008
2009
2010
2011
2012
Bcf/d
Data
Vendors
2005
Other
2004
Finance
Billion m3
120
2013
November 2014
Market
Analysis
65
Power
Petroleum
400
Editorial
450
Summary
What justifies the investment of billions of dollars to create more than a dozen LNG facilities
within the next 5-10 years? Who will be willing to pay for gas from these facilities? With a
surplus of gas in both the United States and Canada, both countries may soon be competing
for consumers as both countries plan for the construction of LNG facilities. While there is talk
of possible exports to Europe, the primary LNG market will likely be Asia. The National Energy
Board (NEB) reports that Japan, China, India, and Taiwan have had growing demand for LNG
from 2005 onwards (Figure 8), with Japan responsible for 40% and South Korea 16% of
global LNG consumption respectively.
InDepth
Driven by Demand
350
300
250
Nat Gas
200
150
100
50
Winter 2005/06
Japan
Summer 2006
Winter 2006/07
South Korea
Summer 2007
Taiwan
Winter 2007/08
Coal
0
Summer 2008
China
66
Market
Analysis
November 2014
Data
Vendors
7 Harper Government Announces Approval of Four Long-term LNG Export Licences, Natural Resources Canada, March 26, 2014,
accessed October 16, 2014, http://www.nrcan.gc.ca/media-room/news-release/2014/15723.
8 Ibid.
Other
The coastal province of British Columbia in particular looks to be an active area for LNG in the
years to come, marking Canadas potential shift toward being a key LNG exporter to Asian
countries. For example, expansion into Japanese and other Asian markets is a major
motivation behind the construction of the $30 billion Steelhead facility. Earlier this year,
Tokyo Electric Power Co. General Manager Toshiaki Koizumi commented on how he expects
Canadian LNG to become one of Japans major importers in the future, saying, We are quite
looking forward to having long-term relations with Canadian people and Canadian LNG We
Finance
In 2010, approximately 30% of Japans electricity came from nuclear energy. Today, nuclear
energy is no longer used due to the Fukushima incident in 2011. As a consequence, natural
gas has increased from 32%-49% of Japanese power generation, a large portion of which
is delivered in LNG, making Japan the worlds largest LNG importer. Canada is currently the
fifth-largest producer of natural gas in the world and has up to 37 trillion cubic feet of
marketable natural gas resourcesan amount Natural Resources Canada claims is enough
to meet our current production for over 250 years.7 Canadian Minister of Natural Resources
Greg Rickford has emphasized that market diversification for Canadas natural gas remains
a top priority for the Government of Canada. Canada has ... the potential to become a major
global supplier of LNG.8
Softs and
Metals
LNG ImportSeasonal
Winter 2005-Summer
2008
(106m3cubic
/d) meters oer day) [Source: NEB]
Figure 8 - East-Asia
LNG Imports
(million
Editorial
Power
Petroleum
Nat Gas
Coal
A notable exception to the trend in Asian-North American LNG trading is the case of Taiwan.
Taiwan imports 98% of its natural gas in the form of LNG, accounting to more than
600 billion cubic feet of LNG in 2013 alone.12 Taiwans key LNG suppliers are Qatar, Malaysia,
and Indonesia, which account for 86% of 2013s gas imports. Noticeably absent are imports
from North America or European countries (including Russia).
Summary
South Korea and China may soon be significant importers of LNG from the United States and
Canada. South Korean Deputy Minister of Energy Kim Jun-Dong commented, Import costs
from the US are likely to be lower than those of LNG from the Middle East, due to Asian
premium costs.10 Additionally, South Korea is looking to reduce its greenhouse gas
emissions, which have historically been high due to a large consumption of coal, where LNG
can act as an appropriate greener substitute. In Chinas case, its increased consumption of
LNG is largely due to its significant economic growthits GDP in 2013 exceeded twice the
global averagemeaning an increased need for energy resources. Singapore, Indonesia,
Malaysia, Thailand, the Philippines, and Vietnam are expected to have gas consumption to
increase from 9.5 trillion cubic feet in 2013 to 18.7 quadrillion cubic meters by 2030, with
nearly 60% of LNG imported from elsewhere.11
InDepth
used to line it up, say, Russia, Mozambique, Canada. Currently, its Canada, Russia,
Mozambique.9 While natural gas exports appear to have been decreasing steadily in Canada
since 2008, most of the aforementioned LNG facility construction projects were planned to
begin in 2015, making the possibility of increased exports more likely in the coming years.
Other
Market
Analysis
67
Data
Vendors
9 Vanderklippe, Nathan, In Japan, an LNG revolution looks to Canada, The Globe and Mail, January 21, 2014, accessed July 18, 2014,
http://www.theglobeandmail.com/report-on-business/industry-news/energy-and-resources/in-japan-an-lng-revolution-looks to-canada/article16420312/.
10 Ibid.
11 Ibid.
12 Taiwan: Country Analysis Note, Energy Information Administration, September 1, 2014, accessed October 10, 2014,
http://www.eia.gov/countries/country-data.cfm?fips=tw.
13 Angevine, Gerry, and Vanadis Oviedo, Laying the Groundwork for BC LNG Exports to Asia, The Fraser Institute, October 1, 2012,
Accessed November 27, 2014. http://www.fraserinstitute.org/uploadedFiles/fraser-ca/Content/research-news/research/
publications/laying-the-groundwork-for-BC-LNG-exports-to-asia.pdf.
14 Price of Liquefied U.S. Natural Gas Exports, Energy Information Administration, September 30, 2014, Accessed November 27, 2014,
http://www.eia.gov/dnav/ng/hist/n9133us3m.htm.
November 2014
Finance
Securing long-term supply commitments has been no easy task for Canadian investors. On
July 31, 2014, Apache Corp. pulled out of its partnership with Chevron to construct the
Kitimat, BC, LNG projectthe most developed of the new LNG projects so far in
British Columbia. A lack of secure buyers for LNG led Jana Partners to criticize Apache Corp.
Softs and
Metals
Japan is an especially attractive customer of Canadian LNG. Today, Japan is willing to pay
$15 USD/Mcf (thousand cubic feet), whereas suppliers in Western Canada typically have
been selling at $3 USD/Mcf.13 This implies that if Canadian suppliers were to increase their
export price, Japanese customers would still be willing to purchase Canadian LNG over
Japans current suppliers (so long as Canadian suppliers charge less than $15 USD/Mcf). To
compare, the United States has charged an average of $10-15 USD/Mcf since 2010.14 This
price gap could bring about large profits for Canadian producers if they can out-compete the
United States in the Asian LNG trade in the future.
Summary
Editorial
Power
Petroleum
Nat Gas
LNG developers must confirm the existence of downstream buyers and sign long-term
contracts (typically 20-25 years) with strict terms and structures for gas pricing and
distribution to prove the security of their investments to the financing parties. Securing
investors and purchasers is difficult due to the expectation of investors that there be
purchasers in advance and the expectation of purchasers that there be investors in advance.
Usually, one of the two groups has to take the first risk in order to attract the other group, with
LNG developers having to attract both groups and to mediate between the demands of both
parties. As a result, the LNG business has been limited to companies with strong financial and
maybe even political resources. Major international oil companies such as ExxonMobil, Royal
Dutch Shell, BP, BG Group, and Chevron, as well as national oil companies such as Pertamia
(Indonesia) and Petronas (Malaysia) are active in the North American LNG industry.
InDepth
for its inability to ensure long-term stability of the LNG plant. Jana Partners has a $1 billion
stake in Apache Corp.15 To make matters more complicated for Canadian LNG projects, the
controversial Canada-China Foreign Investment Promotion and Protection Agreement (FIPPA),
which the Harper government signed into effect on September 12, 2014,16 binds Canada and
China to an agreement lasting until 2043 with the consequence that any BC government or
legislature or courts would now be subject to obligations arranged by the Canadian federal
government and China, which could potentially overrule the rights of First Nations.17 FIPPA
could therefore dominate BC energy politics for the next two decades.
Coal
Softs and
Metals
What does seem clear is that the United States and Canada
will compete for foreign consumers as each country has excess
natural gas to profit from, making the Asia-Pacific region one of the
most dynamic and exciting markets in the years to come.
Market
Analysis
68
Data
Vendors
November 2014
Other
15 Gilbert, Daniel, and Gillian Tan, Jana Partners Wants Changes at Apache, The Wall Street Journal, July 21, 2014,
accessed October 3, 2014, http://online.wsj.com/articles/jana-partners-has-apache-stake-of-more-than-1-billion-wants changes-1405982450.
16 Isfeld, Gordon, Ottawa Ratifies Foreign Investment Deal with China despite Tensions, Financial Post, September 12, 2014, accessed
September 30, 2014, http://business.financialpost.com/2014/09/12/ottawa-ratifies-contentious-foreign-investment-deal-with-china despite-tensions.
17 Hong, Beth, Canada-China FIPPA Agreement May Be Unconstitutional, Treaty Law Expert Says, Vancouver Observer, October 12, 2012,
accessed September 30, 2014, http://www.vancouverobserver.com/politics/canada-china-fippa-agreement-unconstitutional treaty-law-expert-says.
18 Gordon, Julie, Woodfibre LNG, British Columbia Sign Deal on Natgas Export Proposal, Reuters, March 7, 2014, accessed
September 30, 2014, http://www.reuters.com/article/2014/05/07/canada-lng-woodfibre-idUSL2N0NT1WN20140507.
Finance
Besides Japan, Indonesia has its hand in Canadian LNG projects with both Singapore and
Jakarta backing the Woodfibre LNG project. Reports say that Sukanto Tanoto, an Indonesian
billionaire looking to invest money in LNG, will help finance this project.18 Shipments to Asia
are expected to begin as early as 2017 with Tanotos RGE Group providing heavy
financial support. On May 7, 2014, RGE Group signed a letter of intent with the
BC Government. As part of the deal, British Columbia has committed to providing certainty on
all government-related costs, including formalizing its new two-tier tax on LNG export
Editorial
Power
The Liquefied Natural Gas Income Tax Act imposes a tax on net income from liquefaction
activities at any LNG facility within British Columbia.20 Taxpayers are not required to be
residents of Canada nor to have a permanent establishment in British Columbia. The term
taxpayers also includes corporations, individuals, and trusts. Most significantly, the tax rate
on net income will be 3.5% for taxation years beginning on or after January 1, 2017,
increasing to 5% for taxation years beginning on or after January 1, 2037.
Finance
Other
Data
Vendors
Market
Analysis
69
Softs and
Metals
19 Liquefied Natural Gas Income Tax, Government of British Columbia, October 21, 2014, accessed November 20, 2014,
http://www2.gov.bc.ca/gov/topic.page?id=75BD4BF2B6B5493FB8A36DB05EBA764D.
20 British Columbias LNG Income Tax - An Overview, Government of British Columbia, October 21, 2014, Accessed November 26, 2014,
http://www2.gov.bc.ca/gov/DownloadAsset?assetId=37B76560978C491F961C610E2F483745&filename=lng-income tax-overview.pdf.
21 Official Report of Debates of The Legislative Assembly, The Legislative Assembly of British Columbia, November 4, 2014, Accessed
November 26, 2014, http://www.leg.bc.ca/hansard/40th3rd/20141104pm-Hansard-v17n4.htm.
22 Qatar, Energy Information Administration, January 30, 2014, accessed October 7, 2014, http://www.eia.gov/countries/
cab.cfm?fips=qa.
23 Yee, Adrian, Enbridges Northern Gateway: Energy Politics & Oil Spread Pricing, ZE Perspective, July 14, 2014, accessed
September 15, 2014, http://www.blog.ze.com/2014/07/enbridges-northern-gateway-energy-politics-oil-spread-pricing-2/.
Coal
While Qatar remains the largest exporter of LNG in the world,22 the North American LNG
market is quickly growing. However, many challenges lie ahead. With geopolitical tensions
on the rise in Ukraine, as well as environmental and First Nations activists pressing for energy
reform in Canada, factors that at first seem far removed from LNG facilities in the Asia-Pacific
region could have a significant impact on legislation, regulations, and financial matters in the
years ahead. Environmental politics and strict regulations have been difficult barriers for LNG
markets. The approval of the NEB and FERC are required to permit project capacity,
construction sites, and service dates. In the case of Canada, this process is lengthy, at times
leading to stand-offs among the government, First Nations groups, and environmental
regulators, as in the case of Enbridges Northern Gateway project.23 Equally important are
the factors driving the shale gas revolution in the United States and its surplus of natural gas,
Nat Gas
Conclusion
Petroleum
As observers of the 2011 BC election will have noted, the prospect of a thriving BC LNG
industry was one of the centerpieces of Christy Clarks successful election campaign for
BC premier. Clark alleged the project would collect up to $100 billion over the next 30 years,
money that would be used to eliminate provincial debt.21 It is still too early to tell whether or
not this promise will be fulfilled; however, it is clear that the LNG export tax policy will
affect traders of BC LNG, foreign and domestic investors, construction projects, transportation
projects, and even BC citizens. This will in turn have consequences for the success of Clarks
election promises. Some investors have expressed their concern that the tax rate is too high
and therefore not competitive enough to sustain investors commitments to LNG projects,
which could lead to an increase in provincial debt rather than alleviating it. Whether or not, for
example, RGE group will continue to invest in the Woodfibre LNG project may hinge on future
amendments to this tax policy.
November 2014
Summary
InDepth
terminals.19 Additionally, Shamsul Abbas, CEO of Malaysian oil and gas company Petronas,
also questioned the BC Governments upcoming tax reform, expressing concern about the
$22 million in municipal taxes being asked by the government of Port Edward, BC, where
Petronas LNG project will reside.
Editorial
Power
Petroleum
24 Midterm Management Plan (Fiscal 2014 2016), Tokyo Commodity Exchange, March 1, 2014, accessed November 21, 2014,
http://www.tocom.or.jp/news/2014/documents/MidtermManagementPlan_2014-2016_000.pdf.
Summary
Capturing a higher-level overview of LNG projects and facilities can enable traders, investors,
and analysts to make sound investment decisions and enhance overall market
understanding. LNG markets are soon to be the most fruitful in the Asia-Pacific region as
North American facilities are constructed, international investments made, and the
TokyoCommodities Exchange is soon to trade the worlds first LNG futures contracts.24
Whether or not future North American LNG projects will succeed is still too soon to tell. What
does seem clear is that the United States and Canada will compete for foreign consumers as
each country has excess natural gas to profit from, making the Asia-Pacific region one of the
most dynamic and exciting markets in the years to come. f
InDepth
which appear to be strong influences in shaping the future of natural gas exports in both
Canada and the United States.
Nat Gas
Coal
Softs and
Metals
Finance
Other
Data
Vendors
Market
Analysis
November 2014
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Angevine, Gerry, and Vanadis Oviedo. Laying the Groundwork for BC LNG Exports to Asia. The Fraser Institute.
October 1, 2012. Accessed November 27, 2014. http://www.fraserinstitute.org/uploadedFiles/fraser-ca/
Content/research-news/re search/publications/laying-the-groundwork-for-BC-LNG-exports-to-asia.pdf.
Power
British Columbias LNG Income Tax - An Overview. Government of British Columbia. October 21, 2014. Accessed
November 26, 2014. http://www2.gov.bc.ca/gov/DownloadAsset?assetId=37B76560978C491 F961C610E2F483745&filename=lng-income-tax-overview.pdf.
Editorial
Barteau, Mark, and Sridhar Kota. Shale Gas: A Game-Changer for U.S. Manufacturing. The Energy Institute of the
University of Michigan. July 1, 2014. Accessed October 15, 2014. http://energy.umich.edu/sites/default/files/
PDF Shale Gas FINAL web version.pdf.
Summary
InDepth
Bibliography
Petroleum
Cockerham, Sean. More Efficient Fracking Means More Oil and Natural Gas. Star-Telegram. October 6, 2014.
Accessed October 8, 2014. http://www.star-telegram.com/2014/10/06/6179292/more-efficient fracking-means.html?rh=1.
Gordon, Julie. Woodfibre LNG, British Columbia Sign Deal on Natgas Export Proposal. Reuters. March 7, 2014.
Accessed September 30, 2014. http://www.reuters.com/article/2014/05/07/canada-lng-woodfibre idUSL2N0NT1WN20140507.
Nat Gas
Harper Government Announces Approval of Four Long-term LNG Export Licences. Natural Resources Canada.
March 26, 2014. Accessed October 16, 2014. http://www.nrcan.gc.ca/media-room/
news-release/2014/15723.
Isfeld, Gordon. Ottawa Ratifies Foreign Investment Deal with China despite Tensions. Financial Post.
September 12, 2014. Accessed September 30, 2014. http://business.financialpost.com/2014/09/12/
ottawa-ratifies-contentious-foreign-investment-deal-with-china-despite-tensions/.
Coal
Hong, Beth. Canada-China FIPPA Agreement May Be Unconstitutional, Treaty Law Expert Says. Vancouver Observer.
October 12, 2012. Accessed September 30, 2014. http://www.vancouverobserver.com/politics/
canada-china-fippa-agreement-unconstitutional-treaty-law-expert-says.
Softs and
Metals
Lamers, Matthew. B.C.s 15 LNG Projects: Where They Stand Today. Pipeline News North. April 17, 2014.
Accessed September 30, 2014. http://www.pipelinenewsnorth.ca/news/industry-news/b-c-s-15-lng projects-where-they-stand-today-1.1122622.
Midterm Management Plan (Fiscal 2014-2016). Tokyo Commodity Exchange. March 1, 2014. Accessed
November 21, 2014. http://www.tocom.or.jp/news/2014/documents/
MidtermManagementPlan_2014-2016_000.pdf.
Other
Natural Gas. Energy Information Administration. November 12, 2014. Accessed November 20, 2014.
http://www.eia.gov/forecasts/steo/report/natgas.cfm.
Finance
Liquefied Natural Gas Income Tax. Government of British Columbia. October 21, 2014. Accessed November 20, 2014.
http://www2.gov.bc.ca/gov/topic.page?id=75BD4BF2B6B5493FB8A36DB05EBA764D.
Official Report of Debates of The Legislative Assembly. The Legislative Assembly of British Columbia.
November 4, 2014. Accessed November 26, 2014. http://www.leg.bc.ca/
hansard/40th3rd/20141104pm-Hansard-v17n4.htm.
Data
Vendors
Price of Liquefied U.S. Natural Gas Exports. Energy Information Administration. September 30, 2014.
Accessed November 27, 2014. http://www.eia.gov/dnav/ng/hist/n9133us3m.htm.
Qatar. Energy Information Administration. January 30, 2014. Accessed October 7, 2014.
http://www.eia.gov/countries/cab.cfm?fips=qa.
Market
Analysis
November 2014
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Summary
Editorial
Yee, Adrian. Enbridges Northern Gateway: Energy Politics & Oil Spread Pricing. ZE Perspective. July 14, 2014.
Accessed September 15, 2014. http://www.blog.ze.com/2014/07/enbridges-northern-gateway energy-politics-oil-spread-pricing-2/.
InDepth
Vanderklippe, Nathan. In Japan, an LNG revolution looks to Canada. The Globe and Mail. Accessed July 18, 2014.
http://www.theglobeandmail.com/report-on-business/industry-news/energy-and-resources/in-japan-an-lng-
revolution-looks-to-canada/article16420312.
Power
Petroleum
Nat Gas
Coal
Softs and
Metals
Finance
November 2014
Market
Analysis
Disclaimer:
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